India is working towards reaching 500 GW of installed electricity capacity from non-fossil sources by 2030. So far, a total of 172.72 GW of capacity from non-fossil energy sources has been installed in the country as of October 10, 2022, according to government data.
India ranks fourth globally in renewable energy installed capacity (including large hydro), fourth in wind capacity and fourth in solar capacity (according to REN21 Renewables 2022 Global Status Report).
A total of 14.21 GW of renewable energy (RE) capacity was added from January to October 2022, compared to a capacity of 11.9 GW added in the same period in 2021. the period January to Sept 2022 compared to the 128.95 BU in the same period in 2021.
As the 2023 budget is scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, the energy sector has made some suggestions and pushed for some initiatives to meet the demands.
Amit Jain, MD, Engie India, said that the share of renewable energy in India’s overall energy mix has increased and that India is well on track to reach its current target of 500 GW of renewable capacity to meet 50% of its energy needs by 2030 .
“To meet this ambitious target, the Central Electricity Authority (CEA) estimates that an investment of Rs 2.44 trillion would be required and a significant portion of this would be in the form of foreign direct investment. The budget can be aimed at expanding policies that can facilitate investments in renewable energy. These include tax policies (such as lower taxes on profits and GST on clean energy sales) and support for foreign exchange investments,” said Jain.
Read also: Budget expectations for 2023: will home buyers get more lighting? This is what the real estate industry wants from FM
Jain suggested that the government could consider innovative financing mechanisms to ensure that renewable energy developers are able to raise long-term debt in foreign currency or through the international bond market, while asking domestic banks and other financial institutions to increase their supply of risk instruments and financing capacity for renewable projects. .
Other innovations that the government could consider that could boost renewable energy growth could include virtual corporate power purchase agreements, which could discourage power sales in the open access market to some extent; and an energy transition mechanism and a robust carbon credit market, he added.
Pratik Agarwal, Managing Director, Sterlite Power and Director of Serentica Renewables, said, “India has a large PF corpus of more than Rs 17 lakh crores in EPFO. The 2023 budget should focus on mobilizing part of this corpus as debt or equity in greenfield infrastructure projects. This will give retirees a better return and project developers an abundance of homegrown capital. In the energy world, policy push makes a big difference. So we hope for extra emphasis and budgetary support to promote new areas of energy , such as offshore wind energy and grid balancing solutions, including hydropower.”
With India aiming to become a $5 trillion economy by 2025, experts stressed that the government’s investments to expand India’s infrastructure sector must be continuously accelerated.
Anil Chaudhry, zone president, India and CEO and MD, Schneider Electric India, said: “Focusing on the adoption of energy-efficient sustainable solutions and accelerating digitization by leveraging AI (Artificial Intelligence) and other advanced technologies could prove to be a game changer in India’s infrastructure sector.”
“We believe that more attention should be paid in the budget to attract additional investment from the private sector to increase the growth of India’s infrastructure through more public-private partnerships. A digitally enabled and connected infrastructure ecosystem in India would help support India’s goal of becoming net zero by 2070,” Chaudhry added.
Some industry experts underlined the need for a Production Linked Incentive for wind turbine manufacturers. In the period January to October 2022, a total capacity expansion of 1761.28 MW was achieved.
Inder Bhambra, country head, BD and sales, Envision Energy India, said: “The industry expects the budget to introduce a PLI program for wind turbine manufacturers, which will increase household equipment output, reducing installation costs. “
Also read: Budget expectations 2023: will your restaurant bill go down? This is what the F&B industry wants from FM
Bhambra also urged the government to consider treating renewable energy certificates in the same way as carbon credits and grant favorable taxation on the income generated from them.
“The government should take steps to strengthen India’s renewable energy capacity by reducing the GST rate on sales of wind and solar equipment. With consistent fiscal support, we are confident that India’s renewable energy industry can double its renewable energy capacity by 2027,” added Bhambra.
In addition, the draft National Repowering Policy for Wind Energy Projects, 2022 has been released for government stakeholder consultation. The objectives of the policy are optimal use of wind energy resources by maximizing the energy yield (kWh) per square kilometer of the project area and by using the latest state-of-the-art onshore wind turbine technologies.
Read all the latest business news here
