Union Budget 2024: Key Highlights on the Energy Sector

On July 23, this year the Union Finance Minister Nirmala Sitharaman presented her seventh Union Budget, which placed a strong emphasis on renewable energy and sustainability. This budget reflects the government’s focus on achieving energy security, creating jobs in the clean energy sector, and advancing India’s commitment to a greener future. The following are the key initiatives and allocations aimed at transforming India’s energy landscape:

Fund Allocation to Ministry of New and Renewable Energy (MNRE):

• An allocation of Rs 19,100 crore to support renewable energy initiatives.
• Emphasis on energy security and job creation in clean energy sectors.

Renewed focus on Solar Energy:

• Increased allocation to Rs 10,000 crore, up 110% from the previous year.
• Launch of PM Suryaghar Muft Bijli Yojana to support rooftop solar installations to cover 1 crore households.

Emphasis on Bioenergy:

• Continued support for Compressed Biogas (CBG) projects.
• No new announcements, while the focus remains on achieving 20% ethanol blending and 5,000 CBG projects.
• Need for bio-slurry utilization and biomass bank development.

Steps pertaining to Critical Minerals:

• Exemption of Basic Customs Duty on 25 critical minerals necessary for generation of renewable energy.
• Calls for more domestic R&D and recycling infrastructure to reduce dependency on imports.

Energy Storage:

• Proposal for a policy on Pumped Hydro Storage to address energy intermittency.
• Focus on overcoming barriers like ecological challenges and project timelines.

Optimizing Wind Energy Production:

• Need for repowering aging turbines in Tamil Nadu to optimize wind energy production.

The budget reflects a commitment towards decarbonizing the energy sector and improving workforce skills. The key highlights include efforts to enhance energy mix diversity, promote sustainable practices, and address climate change challenges.

Conclusion

The Union Budget 2024 emphasizes India’s commitment to sustainable development through significant investments in the renewable energy sector. With increased funding for solar projects and critical minerals, alongside new initiatives like the PM Muft Bijli Yojana, the government aims to bolster clean energy adoption and enhance energy security. However, the budget also highlights ongoing challenges, particularly in sectors like wind energy and bioenergy, where policy clarity and infrastructure improvements are needed. Overall, while the budget sets a foundation for a greener future, continued efforts and strategic alignment will be crucial to achieving India’s ambitious renewable energy targets and ensuring inclusive growth.