With the announcement of to achieve 500 gigawatts (GW) and a 50 per cent share of energy from non-fossil fuels by 2030, there is a lot to look in to the 2022-23 budget. The same has to be backed up with a net-zero emissions by 2070 pledge delivered at COP26.
For these ambitious targets to be achieved, the renewable energy sector will require a substantial government financial support in the form of a mixture of subsidies, import tariff restrictions, interest free loans, better tax structures and careful policy framing for both states and DISCOMs.
For the budget of 2022-23, the government will primarily aim to lower the fiscal and current account deficit. This will provide a huge push for domestic manufacturing and reduce the reliance on expensive fossil fuel imports.
The government will focus on building new energy initiatives already actioned during 2021 in response to the COVID-19 induced crisis and to boost economic growth. This will also include production-linked incentive (PLI) scheme for renewable energy including batteries to boost domestic manufacturing. Prioritizing greening of Indian railways, sector lending to project renewable projects and provision of further capital to the Solar Energy Corporation of India (SECI) and the Indian Renewable Energy Development Agency (IREDA).
India is at present 4th largest country in terms of installed wind power and the 5th largest in installed solar power in world. Also, India is 4th largest country in terms of installed renewable energy. India’s renewable energy sector has a share of ~38 per cent in total installed generation capacity. Having 26GW of tenders already in pipeline with various supportive measures to sector including 100% FDI, PLI Scheme, dedicated investment outlay of $70-80Bn etc the sector should continue to maintain momentum in medium term.