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As a nation, we need to take a ‘wholistic’ approach to energy transition. The key elements underpinnings India’s energy transition include renewable energy, smart metering, hydrogen based economy, carbon markets, domestic production of key supply chain products, pumped hydro projects, EV penetration, small nuclear reactors and a robust grid. Whilst evolution to a sustainable green circular economy hinges on continuing on its present path, as outlined by the Prime Minister in his ‘Panch Amrit’, this forthcoming budget provides a perfect platform for bolstering such initiatives.
The renewable energy sector has seen resounding success in India and globally, with India’s installed capacity having grown in leaps and strides to its present quantum of 210 GW. However, certain additional measures are absolutely necessary in order to keep pace and to be able to meet the country’s target of achieving 500 GW of renewable energy and to meet rising demand (which is itself a function of a growing population, expanding economy and the rise of new energy intensive sectors such as Artificial Intelligence and data mining). Some of the key measures that the forthcoming budget should be responsive to, include:
- Distribution and transmission infrastructure for evacuation, particularly inter-state transmission systems, will need to be strengthened to accommodate and integrate the increasing share of renewable energy as well as ensure efficient transmission of renewable energy generated in one state to consumption centers in other states. This would reduce curtailment and help in balancing supply-demand mismatches across regions. The green energy corridor project, which received Rs 600 crore in 2024-25, is expected to see further allocations to enhance transmission infrastructure.
- Alongside these efforts, there is a need to develop a reliable and sufficient energy storage, including pumped-hydro storage, to integrate the large volumes of renewable energy into the grid having regard to their variable nature. Incentivising investment in these technologies, including by way of expanding and PLI schemes, reduced import duties and lower corporate taxes will enable India to develop a flexible, resilient energy system capable of managing the growing share of renewable energy while reducing dependence on fossil fuels.
- A significant portion of India’s renewable energy target of 500 MW by 2030 will come from solar energy. To meet this target sustainably and reduce dependence on imports, it is crucial to build a robust domestic manufacturing ecosystem across the entire solar value chain. India’s solar value chain will get a great fillip if the budget expands the PLI scheme to cover upstream materials like polysilicon and wafers.
- There is a pressing need for sustainable waste-to-energy solutions. Enhancing the waste-to-energy sector remains an urgent and pressing concern in order to both meeting energy needs and find a sustainable solution to waste. Scaling up investments in the sector will require supportive policies and incentives from the government, institutional strengthening and robust project preparation.
- The rooftop solar sector plays a crucial role in India’s climate change strategy. As part of the 500 GW renewable energy target by 2030, 40 GW by 2022 was accounted for from the solar rooftop sector, which could not be achieved. However, given its immense potential and role in India’s climate strategy, if amongst others, there is a need to address challenges such as restrictions on capacity caps for net-metering for industrial establishments, inconsistent policy frameworks across states relating to discrepancies in incentives, net metering policies, and installation procedures and improving access to low interest financing specially for residential and small and medium enterprises. If these challenges are addressed, rooftop solar can be a key component in India’s energy transition and contribute to the country’s renewable energy targets, reduce carbon emissions, and enhance energy security.
- On the electric vehicles front, introduction of performance linked incentive schemes for domestic battery manufacturing, implementation of uniform GST across all EV components (including batteries and charging infrastructure) and standardization of attractive rates of interest for EV loans remain at the forefront of the wish list for manufacturers. Capital allocation for development of charging infrastructure will be a critical growth enabler and much needed for building confidence of customers and businesses to transition to green vehicles.
- Exploration and mining of rare earth resources in India, which are reported to be the fifth largest in the world, should be prioritised, possibly by through a dedicated agency (or suitably equipping, by means of adequate budgetary grants, existing agencies such as IREL). This assumes significance given renewed focus on SMRs and the US Government’s recent announcement to delist certain Indian entities from the sanction list.
- As India is poised to become and is positioning itself as a global hub for green hydrogen production and export, it is imperative to extend and expand the National Green Hydrogen Mission, with its potential to cut fossil fuel imports by ₹1 lakh crore and carbon emissions by 5 MMT by 2030, and which approved with an outlay of ₹19,744 crore.
- Besides giving a fillip to the hydrogen economy, a vibrant and deep carbon market will not only help improve India’s green cover but also establish India’s position in the export of carbon credits and in meeting its Nationally Determined Contributions. To this end, the budget should provide for a sinking fund for carbon credits and for carbon projects so that start up funds and developers are able to develop carbon projects at lower costs and entities obligated to purchase carbon credits have access to funds so as to discharge their obligations to offset their carbon footprint at reduced costs.
India, like the rest of the world, is facing the twin challenge of sustaining robust economic growth while also tackling the clear and present threat of climate change. While India has admirably performed this tightrope balancing act, it is imperative that efforts be revitalised and sustained, something that the upcoming budget gives ample opportunity to do.
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The key elements underpinnings India’s energy transition include renewable energy, smart metering, hydrogen based economy, carbon markets, domestic production of key supply chain products, pumped hydro projects, EV penetration, small nuclear reactors and a robust grid.
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As a nation, we need to take a ‘wholistic’ approach to energy transition. The key elements underpinnings India’s energy transition include renewable energy, smart metering, hydrogen based economy, carbon markets, domestic production of key supply chain products, pumped hydro projects, EV penetration, small nuclear reactors and a robust grid. Whilst evolution to a sustainable green circular economy hinges on continuing on its present path, as outlined by the Prime Minister in his ‘Panch Amrit’, this forthcoming budget provides a perfect platform for bolstering such initiatives. The renewable energy sector has seen resounding success in India and globally, with India’s installed capacity having grown in leaps and strides to its present quantum of 210 GW. However, certain additional measures are absolutely necessary in order to keep pace and to be able to meet the country’s target of achieving 500 GW of renewable energy and to meet rising demand (which is itself a function of a growing population, expanding economy and the rise of new energy intensive sectors such as Artificial Intelligence and data mining). Some of the key measures that the forthcoming budget should be responsive to, include:
- Distribution and transmission infrastructure for evacuation, particularly inter-state transmission systems, will need to be strengthened to accommodate and integrate the increasing share of renewable energy as well as ensure efficient transmission of renewable energy generated in one state to consumption centers in other states. This would reduce curtailment and help in balancing supply-demand mismatches across regions. The green energy corridor project, which received Rs 600 crore in 2024-25, is expected to see further allocations to enhance transmission infrastructure.
- Alongside these efforts, there is a need to develop a reliable and sufficient energy storage, including pumped-hydro storage, to integrate the large volumes of renewable energy into the grid having regard to their variable nature. Incentivising investment in these technologies, including by way of expanding and PLI schemes, reduced import duties and lower corporate taxes will enable India to develop a flexible, resilient energy system capable of managing the growing share of renewable energy while reducing dependence on fossil fuels.
- A significant portion of India’s renewable energy target of 500 MW by 2030 will come from solar energy. To meet this target sustainably and reduce dependence on imports, it is crucial to build a robust domestic manufacturing ecosystem across the entire solar value chain. India’s solar value chain will get a great fillip if the budget expands the PLI scheme to cover upstream materials like polysilicon and wafers.
- There is a pressing need for sustainable waste-to-energy solutions. Enhancing the waste-to-energy sector remains an urgent and pressing concern in order to both meeting energy needs and find a sustainable solution to waste. Scaling up investments in the sector will require supportive policies and incentives from the government, institutional strengthening and robust project preparation.
- The rooftop solar sector plays a crucial role in India’s climate change strategy. As part of the 500 GW renewable energy target by 2030, 40 GW by 2022 was accounted for from the solar rooftop sector, which could not be achieved. However, given its immense potential and role in India’s climate strategy, if amongst others, there is a need to address challenges such as restrictions on capacity caps for net-metering for industrial establishments, inconsistent policy frameworks across states relating to discrepancies in incentives, net metering policies, and installation procedures and improving access to low interest financing specially for residential and small and medium enterprises. If these challenges are addressed, rooftop solar can be a key component in India’s energy transition and contribute to the country’s renewable energy targets, reduce carbon emissions, and enhance energy security.
- On the electric vehicles front, introduction of performance linked incentive schemes for domestic battery manufacturing, implementation of uniform GST across all EV components (including batteries and charging infrastructure) and standardization of attractive rates of interest for EV loans remain at the forefront of the wish list for manufacturers. Capital allocation for development of charging infrastructure will be a critical growth enabler and much needed for building confidence of customers and businesses to transition to green vehicles.
- Exploration and mining of rare earth resources in India, which are reported to be the fifth largest in the world, should be prioritised, possibly by through a dedicated agency (or suitably equipping, by means of adequate budgetary grants, existing agencies such as IREL). This assumes significance given renewed focus on SMRs and the US Government’s recent announcement to delist certain Indian entities from the sanction list.
- As India is poised to become and is positioning itself as a global hub for green hydrogen production and export, it is imperative to extend and expand the National Green Hydrogen Mission, with its potential to cut fossil fuel imports by ₹1 lakh crore and carbon emissions by 5 MMT by 2030, and which approved with an outlay of ₹19,744 crore.
- Besides giving a fillip to the hydrogen economy, a vibrant and deep carbon market will not only help improve India’s green cover but also establish India’s position in the export of carbon credits and in meeting its Nationally Determined Contributions. To this end, the budget should provide for a sinking fund for carbon credits and for carbon projects so that start up funds and developers are able to develop carbon projects at lower costs and entities obligated to purchase carbon credits have access to funds so as to discharge their obligations to offset their carbon footprint at reduced costs.
India, like the rest of the world, is facing the twin challenge of sustaining robust economic growth while also tackling the clear and present threat of climate change. While India has admirably performed this tightrope balancing act, it is imperative that efforts be revitalised and sustained, something that the upcoming budget gives ample opportunity to do.