Union Budget 2024: Energy transition key focus area; solar, nuclear, pump storage on radar

Energy transition remain a key focus area for the government with solar, nuclear and pump hydro storage getting a policy push with industry experts saying it will provide a major fillip to the capacity addition in the renewables sector. 

Finance Minister Nirmala Sitharaman said that PM Surya Ghar Muft Bijli Yojana launched in January this year to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month has received an overwhelming response with more than 1.28 crore registrations and 14 lakh applications.

“To support energy transition, I propose to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them,” she said.

Responding to the Budget 2024 announcement, Gautam Mohanka, CEO of Gautam Solar said: “We are aligned with the Prime Minister’s vision of ‘Vocal for local’ which opens new growth avenues for indigenous players and  are committed to supporting the country's renewable energy goals by employing our capacities for optimal returns.”

The budget also mentions a policy for promoting pumped storage projects for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Sandeep Upadhyay, Managing Director – Infrastructure Advisory Centrum Capital Ltd, said that India is now well placed amongst the leaders in generating grid-connected solar power with one of lowest tariff rates globally, however the solar rooftop potential is still widely untapped.

“The announcement by FM today reinforces the vision of the government to tap into the solar rooftop segment and its potential to have an overall mass impact. Focussing on the energy transition theme a detailed policy on pumped storage projects can be expected soon in the coming days potentially proving a major fillip to the capacity addition in the renewables sector,” he said. 

Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat and the government announced roping in the private sector for setting up Bharat Small Reactors, research & development of Bharat Small Modular Reactor, and research & development of newer technologies for nuclear energy.

Keeping in mind that thermal power will remain part of India’s energy mix, the finance minister announced a joint venture between NTPC and BHEL to set up a full scale 800 MW commercial plant using Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency.

“The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy,” added the minister.

The government also announced coming up with a taxonomy for climate finance keeping in mind need for availability of capital for climate adaptation and mitigation to support achievement of the country’s climate commitments and green transition.