Energy sector seeks to boost T&D infrastructure skills in budget – Budget 2024 news

With high temperatures and electricity demand hitting new records year on year, analysts expect the upcoming budget to include reforms to bolster the country’s energy infrastructure.

“The number of adverse weather events is increasing rapidly. And most of the transmission and distribution systems are not prepared for such events. Financing and creating climate-resilient energy infrastructure is a segment that the government can focus on,” said Anujesh Dwivedi, partner, Deloitte India.

Moreover, as the government stubbornly pursues increasing coal-fired generating capacity until renewables become profitable enough to meet peak energy demand, incentives to invest in residual power plants can be expected.

Dwivedi noted that due to minimal addition of thermal power for a long time, the entire ecosystem on the main equipment of the plant was inactive. “The government can come up with some incentives to reactivate this segment of the plant’s balance sheet.”

Industry It also provides for the introduction of a reduced customs duty on imports of photovoltaic modules required for renewable energy projects, in particular green hydrogen projects, in order to accelerate the expansion of renewable energy generation capacity.

“Political support for the green hydrogen mission to address infrastructure, storage and transportation challenges will be important to establish India as a global hub for green hydrogen production,” said Raju Kumar, Energy Tax Leader, EY India.

While the government is focusing on building low-carbon assets, efforts need to be made to decarbonise existing hard-to-cut sectors, experts note. “Therefore, if some budget allocation is made for setting up a few carbon capture pilot projects to demonstrate existing hard-to-cut industries, it would be a welcome step to help decarbonise,” Dwivedi said.

In the interim budget, the government announced a new rooftop solar scheme that aims to install rooftop solar panels on 1 crore households while also providing viability gap funding for offshore wind projects. These measures are in line with the government’s target to increase the share of renewable power to 500 GW by 2030. Last year, the government had also announced the Green Hydrogen Mission with an outlay of ₹19,744 crores by FY30 to shift to non-fossil fuel alternatives.

However, to be able to achieve ambitious goals, the industry is looking for initiatives in the field of skills development and innovation in green technologies..

“The key to closing the existing gaps will be regulations to strengthen skills initiatives and innovation in green technologies,” said Arun Awasthy, president and managing director, Johnson Controls India.

Dwivedi also highlighted that part of the funds will be earmarked for skill development, with a focus on distributed renewable energy sources such as rooftop solar panels, battery storage systems and electric vehicles. Charging fees could be a welcome step.

The industry sees continued support for domestic manufacturing capacity in the form of production-linked incentive programs and programs promoting new and innovative uses of solar energy for cooking and other purposes, especially in rural areas.

“We expect a greater focus on corporate renewable energy procurement, more effective implementation of the green open access regime, more virtual power purchase agreements (PPAs) incentivised through certain mechanisms and continued support in the form of PLI for renewable energy generation,” Dwivedi said.

Udit Garg, CEO and Director, Kundan Green Energy, believes that with the robust investment inflows enabled by stimulus policies in the upcoming budget, the sector can increase renewable capacity by 50-60 GW per year from the current 10 GW to 15 GW.