Union Budget 2024-25 Proposes Ambitious Energy Transition Plans

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The Government will partner with the private sector for setting up Bharat Small Reactors and research and development of Bharat Small Modular Reactor and newer technologies for nuclear energy.

July 2024 : Union Minister for Finance and Corporate Affairs Nirmala Sitharaman has announced that a policy document on appropriate energy transition pathways will be brought out. The focus of the policy will be on balancing the imperatives of high resource-efficient economic growth and employment along with energy security in terms of availability, accessibility and affordability.

The Finance Minister said that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable and intermittent nature in the overall energy mix.

Terming energy transition as critical in the fight against climate change, the Finance Minister announced to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, the Budget 2024-25 proposed not to extend the exemption of customs duties provided to them.

Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat as emphasized by the Finance Minister. Towards that pursuit, the Government will partner with the private sector for setting up Bharat Small Reactors and research and development of Bharat Small Modular Reactor and newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector.

The Finance Minister said that the development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed. Ms. Sitharaman said a joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using AUSC technology and the Government will provide the required fiscal support. She said that development of indigenous capacity for the production of high-grade steel and other 15 advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy.

The Finance Minister also added that a roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated. She announced that appropriate regulations for transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place.

The Finance Minister also announced that an investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The Minister said the scheme will be replicated in another 100 clusters in the next phase.

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