Solar Capacity, EVs, and Nuclear SMRs to Receive Budget Boost for Energy Security
In a significant move towards energy modernization, the central government is set to prioritize enhancements in the electricity sector, with a strong focus on renewable energy sources, in the upcoming 2024-25 budget. Deloitte India partner Anujesh Dwivedi emphasized that the budget will concentrate on localizing the value chain, especially in the manufacturing sectors for solar, hydrogen, and batteries, influenced by global geopolitical changes post-COVID-19.
Dwivedi stated, "The budget is anticipated to further strengthen the government's dedication to these crucial sectors by continuing to enhance local manufacturing capabilities in line with global energy transition trends".
The government’s forthcoming fiscal policies are expected to target the resilience of electricity infrastructure to counter the impacts of increasing adverse weather events due to climate change. This includes significant allocations for the digital transformation of electrical grids to support the integration of Distributed Energy Resources (DERs) and improve capacity to manage rising peak demands.
India, which added an impressive 18 GW of solar capacity in FY24, faces the challenge of increasing its annual renewable energy capacity to about 50 GW to meet a 2030 target of 500 GW of non-fossil fuel generation. Dwivedi noted, "Achieving this level of renewable capacity expansion requires not only the continuation of existing initiatives but also additional efforts, particularly towards corporate renewable energy contributions and offshore wind projects".
The budget is also expected to spotlight emerging energy technologies such as electric vehicles (EVs), green hydrogen, and Nuclear Small Modular Reactors (SMRs). These sectors are seen as vital for enhancing India's energy security and reducing reliance on fossil fuels.
Dwivedi added, "Investments in the upcoming budget are likely to include substantial support for improving transmission and distribution infrastructure. This will be complemented by strategic measures to digitize the grid, thereby enabling it to meet the demands of a modern, more distributed energy system".
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for FY25 on July 23, with the Budget session set to commence on July 22 and conclude on August 12.
