Sitharaman announces energy sector initiatives in Budget 2024, from solar to thermal.

The Union Budget 2024-25 has proposed plans to cover electric vehicles, solar, biofuels, gas, and small hydroelectric power. In this regard, the interim budget announced that under PM Surya Ghar Yojana, a total outlay cost of Rs 75,021 crore has been allocated to light 10 million households and create 17 lakh direct jobs across the solar value chain. It is further expected to add 30 GW of solar capacity and reduce 720 million tonnes of CO2 equivalent. The scheme, the Finance Minister said was generating a remarkable response with over 1.28 crore registrations and 14 lakh applications. The scheme will further provide free electricity up to 300 units to 1 crore households in the country.

She also announced new measures and policies around pumped storage, nuclear, and thermal power plants. “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,” she said.
The FM noted that nuclear power will play an important part in the energy mix for “Viksit Bharat”. To that end, the government shall collaborate with the private sector in three things: Firstly, setting up “Bharat Small Reactors”; secondly, R&D of “Bharat Small Modular Reactors”, and lastly, R&D of newer technologies for nuclear energy.

Sitharaman announces energy sector initiatives in Budget 2024, from solar to thermal.

The R&D funding announced in the interim budget—of Rs 13,208 crore—would be made available for this sector.

Sitharaman said the development of indigenous technology for Advanced Ultra Super Critical thermal power plants with much higher efficiency had been completed. “A joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using AUSC technology. “The government will provide the requisite fiscal support. Over time, such indigenous capacity for production of high grade steel and other advanced metallurgy material for these plants will bring in strong spin off benefits for the economy.”
On energy efficiency, the budget has proposed creation of a roadmap for hard-to-abate sectors, the FM announced on Tuesday. The government will carry out an investment-grade energy audit of traditional micro and small industries in 60 clusters, including those of brass and ceramic. These industries will be financially assisted in the adoption of cleaner forms of energy and in implementing measures for energy efficiency. The scheme will be extended to another 100 clusters in the next phase.
The budget also took care of the energy sector from the exports angle. The finance minister stated that the metals and minerals—some of which are lithium, copper, cobalt, and rare earth elements—are in a class that the nuclear energy, renewable energy, space, defense, telecommunications, and high-tech electronic industries are dependent on.

With such, it is paramount that custom duties for these items be exempted. “I propose to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them.”. This will lend a major fillip to the process of their value addition and bring security in their availability for these strategic and critical sectors,” the minister stated.

Similarly, she suggested an expansion of 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, I propose not to extend the exemption of customs duties provided to them,” she added.