India's Energised Future: Major Hits for Renewable Energy in Interim Budget 2024

India's budgetary commitment to solar energy reflects a visionary approach centred on reform and performance

The renewable energy landscape in India is diverse, featuring significant contributions from solar, wind, hydro, biopower, and nuclear sources.

(Photo: The Quint)

With its staggering population of 1.4 billion, India faces an immense energy demand to fuel its rapidly expanding economy. Over seven and half decades, the nation has transitioned from a power deficit Nation to one with a surplus, boasting a total installed electricity capacity. India is fervently embracing renewable energy sources to align with sustainable development goals. With almost 50 per cent of its electricity capacity derived from non-fossil fuel origins, India is moving towards a country where sustainable energy sources are becoming prominent. 

The renewable energy landscape in India is diverse, featuring significant contributions from solar, wind, hydro, biopower, and nuclear sources. Solar power leads the pack with an installed capacity of 73.32 GW, followed closely by wind at 44.73 GW as of 2023. Notably, India's journey towards renewable energy traces back to its early post-independence years, relying heavily on coal initially but gradually diversifying through hydropower, nuclear energy, wind, and solar initiatives. Wind energy initiatives stand as the fourth-largest producer globally. Solar energy applications have made a widespread positive impact, leading to India spearheading the International Solar Alliance (ISA), a collaborative platform for global solar energy technology deployment. 

As a renewable and widely available energy source, Biomass has also played a crucial role in India's energy landscape, with over 800 biomass power and cogeneration projects contributing to the grid, generating 10.8 GW of energy. India's efforts in decoupling economic growth from greenhouse gas emissions are evident through initiatives like the National Hydrogen Mission and the Ujala LED bulb campaign, collectively reducing emissions by millions of tonnes annually.

Despite being the most populous country, India maintains comparatively lower per capita CO2 emissions than global averages, emitting only 1.8 tonnes per capita compared to the US's 14.7 tonnes and China's 7.6 tonnes. 

Looking ahead, India aims to achieve Net Zero Emissions by 2070, with interim targets such as increasing renewable capacity to 500 GW by 2030, reducing cumulative emissions by one billion tonnes by 2030, and decreasing emissions intensity of GDP by 45 per cent by 2030. India's experiences navigating these ambitious targets could serve as valuable lessons for other developing nations as they embark on their journeys towards sustainable energy futures. 

Energizing India: Boosting Sustainable Energy Policies 

The budget speech encapsulates a transformative vision for India, envisioning a future where sustainability, economic growth, and environmental stewardship are seamlessly integrated into the nation's development trajectory. The commitment to Amrit Kal Vision 2047 reflects a determined stride toward India's greener, economically vibrant, and sustainable future. Here are some of the highlights.

Empowering India's Solar Revolution: India's budgetary commitment to solar energy reflects a visionary approach centred on reform, performance, and transformation. Focusing on energy security with a three-fold emphasis on accessibility, affordability, and sustainability, the budget allocates resources to a massive rooftop solarisation initiative. Envisaging coverage for one crore households, this endeavour ensures "Muft Bijli" or free electricity up to 300 units monthly and brings substantial benefits. Households can save up to 15-18 thousand rupees annually while having the opportunity to sell surplus energy to companies.

The initiative also promotes the adoption of electric vehicles and opens doors for employment, particularly for the youth skilled in generating and maintaining solar power systems. This budgetary commitment aligns with India's vision for a greener, economically vibrant energy surplus future. 

Enhanced E-Vehicle Ecosystems: Recognizing the crucial role of electric vehicles in reducing carbon emissions, the budget outlines a plan to enhance the e-vehicle ecosystem. The emphasis on adopting electric buses for public transport is a significant step toward sustainable urban mobility, promoting cleaner and more efficient transportation.

Bio-Manufacturing and Bio-Foundry: A groundbreaking initiative highlighted in the budget is the introduction of a scheme for bio-manufacturing and bio-foundry. This innovative approach promotes environment-friendly alternatives such as bio-degradable polymers, bioplastics, biopharmaceuticals, and other bio-based products. This move aligns with the global shift towards regenerative manufacturing principles and positions India at the forefront of sustainable technology.

Initiatives for Urban Transport and Net Zero Path: The comprehensive development plans for urban, environmental sustainability, and economic growth have been eloquently presented during the speech. The expansion of metro rail and Bharath systems, particularly towards transit-oriented development in large cities, is poised to alleviate congestion and reduce emissions. The commitment to achieving net-zero emissions by 2070 is underlined by funding initiatives for offshore wind energy, coal gasification, and the promotion of electric vehicles and bio-manufacturing. In addition, introducing schemes for climate-resilient activities in the blue economy, coastal aquaculture, and mariculture demonstrates a holistic approach to environmental conservation. 

India's Ambitious Green Initiatives

The Indian government has set robust commitments to combat climate change and promote sustainability. By 2030, India aims to slash its total projected carbon emissions by 1 billion tonnes, reduce the carbon intensity of the national economy by nearly 45 per cent, and achieve net-zero carbon emissions by 2070. To realise these goals, the government has initiated various programs and policies. It has approved the establishment of 57 solar parks with a cumulative capacity of 39.28 GW, promoting the development of solar cities in each state. Additionally, a focus on Floating PV Projects is underway, showcasing the commitment to innovative solar solutions. 

The National Green Hydrogen Mission, with an initial outlay of INR 19,744 Cr, is another significant step. This mission includes substantial allocations for the SIGHT program, pilot projects, research and development, and other components, highlighting the government's emphasis on green hydrogen as a key energy source. The offshore wind energy sector is also a priority, with targets set at 30 GW by 2030.

The government recognises the potential of offshore wind in diversifying the renewable energy mix. The Wind-Solar Hybrid Policy introduced in 2018 encourages the integration of wind and solar power to address intermittency challenges, ensuring better grid stability. The policy allows flexibility in determining the share of wind and solar components in hybrid projects, provided one resource contributes at least 25 per cent of the rated power capacity of the other. 

Under the AatmaNirbhar Bharat initiative, a Production-Linked Incentive (PLI) scheme for Solar PV manufacturing has been introduced, backed by a financial outlay of INR 24,000 Cr. Furthermore, the imposition of Basic Customs Duty on Solar Cells (25 per cent) and Solar PV Modules (40 per cent) from April 1, 2022, underscores the government's commitment to bolster domestic manufacturing and achieve self-reliance in the solar sector. These initiatives reflect India's efforts to transition towards a sustainable and self-sufficient energy future.

Evaluating Ambitions and Unveiling Opportunities in the Amrit Kal Budget 

The strategic focus of the green economy aligns with a larger vision for a greener and economically robust future. The dedication to solar energy is emphasised through a comprehensive approach that ensures energy security by prioritising accessibility, affordability, and sustainability. Allocating significant resources to a rooftop solar initiative, covering one crore households and providing up to 300 units of free electricity monthly marks a notable stride towards decentralised and sustainable energy production. This initiative economically empowers households, potentially saving 15-18 thousand rupees annually, and encourages surplus energy sales, fostering a more dynamic energy ecosystem. Promoting electric vehicles adds a green dimension to the transportation sector, creating employment opportunities, especially for youth skilled in solar power systems. 

However, despite these commendable efforts, there is room for more ambitious goals in certain areas. While substantial, the scale of rooftop solarisation could benefit from additional incentives to encourage broader adoption. Aggressively funding and incentivising offshore wind energy projects could leverage India's extensive coastline more effectively. A more comprehensive financial assistance program for biomass aggregation and a robust strategy for electric vehicle adoption, including incentives and infrastructure plans, could further expedite India's transition to a sustainable and environmentally responsible energy landscape. While recognising the positive trajectory set by the budget, these suggestions pinpoint potential areas for additional emphasis to accelerate India's green energy revolution. 

(Anjal Prakash is a Clinical Associate Professor [Research] at Bharti Institute of Public Policy, Indian School of Business [ISB]. He teaches sustainability at ISB and contributes to IPCC reports. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)