Solar capacity, EVs, and Nuclear SMRs to get budget boost for energy security, ET EnergyWorld

New Delhi: In a significant push towards energy modernisation, the central government is gearing up to prioritize enhancements in the electricity sector with an emphasis on renewable energy sources in the upcoming 2024-25 budget. Deloitte India partner Anujesh Dwivedi said that the thrust will be on the localisation of the value chain, particularly in manufacturing for solar, hydrogen, and batteries, catalysed by global geopolitical developments post-COVID19. According to Dwivedi, “The budget is expected to further fortify the government’s commitment to these pivotal sectors by continuing to bolster local manufacturing capabilities that align with global energy transition trends.”

The government’s upcoming fiscal policies are anticipated to target resilience in electricity infrastructure to mitigate the impacts of increased adverse weather events due to climate change. This includes substantial allocations aimed at the digital transformation of electrical grids to support the integration of Distributed Energy Resources (DERs) and enhance capacity to handle rising peak demands.

India, which achieved a notable milestone by adding 18 GW of solar capacity in FY24, faces the challenge of ramping up its annual renewable energy capacity to about 50 GW to meet a 2030 target of 500 GW of non-fossil fuel generation. “Expanding renewable capacity at this scale necessitates not just the continuation of existing initiatives but also an incremental push particularly towards corporate renewable energy contributions and offshore wind projects,” Dwivedi stated.

The budget is also expected to focus on emerging new energy technologies such as electric vehicles (EVs), green hydrogen, and Nuclear Small Modular Reactors (SMRs). These sectors are considered critical for bolstering India’s energy security and reducing its dependency on fossil fuels.

Dwivedi added, “Investments in the upcoming budget will likely include significant support for enhancing transmission and distribution infrastructure. This will be complemented by strategic measures to digitize the grid, thus enabling it to handle the demands of a modern, more distributed energy system.”

Finance Minister Nirmala Sitharaman will present the Union Budget for FY25 on July 23. The Budget session will commence on July 22 and conclude on August 12.