Union Power Minister R K Singh said the Budget 2022-23 has everything that is required for energy transition, including a provision for additional Rs.19,500 crore to boost domestic solar equipment manufacturing by up to 45 gigawatts (GW).
In the Budget, Finance Minister Nirmala Sitharaman provided additional Rs. 19,500 crore for the production-linked incentive (PLI) scheme for solar cells and modules manufacturing domestically.
This will raise the existing PLI scheme for solar equipment from Rs. 4,500 crore to Rs. 24,000 crore, which will translate into creating an additional manufacturing capacity of up to 45 GW in the country.
"Whatever was required for energy transition has been provided in this Budget (presented on Tuesday). We have a challenge of energy transition before us. The energy transition is necessary to deal with climate change," the minister said.
He added that the government has to move towards lower energy sources which cause either lower emissions or none at all.
"We need to do two things. First, we need to produce solar equipment here (in India) which is imported. The government has provided additional Rs. 19,500 crore for PLI for solar manufacturing," Singh said.
He also stated that PLI is a big scheme and helps to create a production capacity of 40 GW to 45 GW of solar equipment here in India, which ranges from polysilicon to modules.
In her Budget Speech, Sitharaman said that to facilitate domestic manufacturing for the ambitious goal of 280-GW installed solar capacity by 2030, an additional allocation of Rs. 19,500 crore for the PLI scheme will be made.
In April 2021, the Union Cabinet approved a Rs. 4,500-crore PLI scheme to boost the domestic manufacturing capacity of solar PV modules.
When the scheme was approved in April 2021, it was aimed at adding a 10,000-megawatt (MW) manufacturing capacity of integrated solar PV modules, entailing a direct investment of Rs 17,200 crore at present.
About raising import duty on solar modules from 20 per cent to 40 per cent, Singh stated that "we will use made-in-India solar modules and, therefore, 40 per cent customs duty will be imposed from April 1, 2022."
The Budget document has also proposed to raise import duty on solar cells to 25 per cent from 20 percent from April 1, 2022.
The minister also said, "(The) government has also provided for green bonds for investment in clean energy projects like green hydrogen".
Sitharaman also proposed that as part of the government's overall market borrowings in 2022-23, sovereign green bonds will be issued for mobilising resources for green infrastructure.
The proceeds will be deployed in public sector projects, which helps in reducing the carbon intensity of the economy.
She also talked about co-firing five to seven per cent biomass pellets in thermal power plants, resulting in CO2 savings of 38 MMT (million metric tonnes) annually.
Regarding giving the infrastructure status to battery energy storage systems, Singh stated that this will improve the credit facility for big projects.
The Budget has proposed that energy storage systems, including dense charging infrastructure and grid-scale battery systems, will be included in the harmonised list of infrastructure. This will facilitate credit availability for clean energy storage.
Singh said the government will also bring out a battery-swapping policy and make green mobility zones.
He added that there could be such zones in overcrowded areas like Connaught Place or Sarojini Nagar.
The minister also lauded the provision of blending of biomass pellets with fuel in thermal power plants.
Jakson Solar Chief Operating Officer Anurag Garg said, "An additional allocation of Rs 19,500 crore for PLI for the manufacturing of high-efficiency modules with a priority to fully integrate manufacturing units from polysilicon to solar PV modules is a welcome move for the sector." He added that it will give further impetus to investments in India, generate more employment and pave the way for an Atmanirbhar Bharat.
Affiliate links may be automatically generated - see our ethics statement for details.