The Budget may see companies being offered grants or viability-gap funding for energy storage projects and offshore wind power plants. To tap the potential of large hydropower projects in the northeast region, the government may announce setting up of new power transmission lines in the budget.
To meet the steep emission targets announced by Prime Minister Narendra Modi at the COP26 climate conclave last year, the government may announce a number of schemes in the Union Budget to boost the renewable energy sector.
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Companies may be offered grants or viability-gap funding for energy storage projects and offshore wind power plants, Mint reported quoting two government officials.
To tap the potential of large hydropower projects in the northeastern region, the government may announce setting up of new power transmission lines in the Budget, the officials told Mint, requesting anonymity. Large hydropower plants can help keep the country’s power grids stable.
Apart from this, the government may also announce incentives for companies setting up infrastructure to support battery swapping for electric vehicles (EVs).
Last year, the government had announced a production-linked incentive (PLI) scheme worth Rs 18,100 crore for battery makers to manufacture locally and cut import dependence. The move is set to boost EV adoption in the country.
At the COP26 climate conference in November last year, Modi had said half of India’s total electricity will be generated from renewable energy by 2030 and enhanced India’s target for installed renewable energy capacity to 500 GW.
According to credit rating agency ICRA, the country needs to add annual capacity of 42GW over the next eight years to meet the target, which will require multi-billion-dollar investments during this period. “The availability of adequate long-term financing avenues at competitive rates remains important for achieving these targets," ICRA said.
Meanwhile, some experts have said the government is lagging in its efforts to build up renewables capacity in a big way due to the lack of support from state governments, Business Insider reported.
The Centre has very few tools and resources to meet the renewable energy commitments, said an expert. “These decisions are actually dealt at the state level and frankly states aren't always bought in for these commitments that the central government puts out there,” Business Insider quoted Richard Rossow of think-tank CSIS as saying.
(Edited by : Thomas Abraham)