Budget 22-23: Several Green Energy Initiatives

Moneylife Digital Team 01 February 2022

Economy & Nation

In Budget 2022-23, finance minister (FM) Nirmala Sitharaman announced that the government will issue sovereign green bonds to mobilise funds to set up green infrastructure projects in the public sector and reduce carbon footprint. These funds will enable the government to achieve the 500 GW renewable energy target by 2030. This is just one of the many measures announced by the FM on green energy. The FM has announced various measures to boost energy transition through electric vehicles (EVs) and solar and green energy.

For EV, the government has announced the launch of a battery swapping policy, which will create interoperability standards for batteries. The government will encourage the private sector to offer battery as a service by providing land resources.

Special mobility zones will be developed for electric vehicles to promote cleantech and green mobility in public transport. Building laws and town planning will also be modernised for battery charging infrastructure. The budget will also promote energy saving and efficiency in large commercial buildings.

The domestic manufacturing of solar power equipment will be promoted using various provisions. FM Sitharaman said, “To support domestic manufacturing of solar panels for meeting the target of 280 GW of installed solar capacity by 2030, Rs19,500 crore for production linked incentive (PLI) for high-efficiency modules, with priority to fully integrated units will be made in 2022-23.”

The government would provide enhanced financial support under the vibrant village programme to set up a distributed renewable energy project in border villages.

The FM has also addressed the issue of stubble burning and farmers’ distress. The budget provides financial support to enable 5% to 7% co-firing of biomass pellets in coal-based thermal power plants. The government would set up four pilot projects for coal gasification and coal to chemical technology.

Data centres and energy storage systems, including grid-scale battery systems, have been accorded infrastructure status. The FM also said that the government would provide duty concessions to boost domestic manufacturing of electronic goods, including smart electricity meters.

The FM also announced additional duty of Rs2 per litre on unblended fuel from Oct 2022, which will encourage ethanol blending of fuel by oil marketing companies (OMCs).

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