MoEFCC and MNRE see hike in budgetary allocation; 10 million houses to be brought under rooftop solar scheme
Centre's rooftop solar programme will enable 10 million households to obtain up to 300 units of free electricity every month. Photo: iStock India’s Finance Minister Nirmala Sitharaman presented the interim Budget 2024-25 on February 1, 2024. Presented in an election year, the budget was restrained, avoiding any high-flown announcements. However, there were several noteworthy allocations and targets relevant to the climate and energy sectors.
Here are some of the takeaways on energy, climate, and the environment from the budget.
To recall last year’s announcement, the budget allocated Rs 35,000 crore for priority investments in energy transition and Net Zero. Of this amount, Rs 30,000 crore was designated to provide capital support to oil marketing companies for undertaking projects for energy transition, energy security and achieving Net Zero emissions by 2070.
This year, there was no such announcement for energy transition. However, budgetary estimates for the central sector scheme on grid-based solar power have more than doubled to Rs 10,000 crore in 2024-25 from the revised estimates of about Rs 4,757 crore in 2023-24. On the other hand, the outlay for wind power stayed almost the same — Rs 930 crore in 2024-25 against Rs 916 crore in 2023-24.
The rooftop solar programme of the central government will enable 10 million households to obtain up to 300 units of free electricity every month, the finance minister mentioned in her speech. This initiative will save households up to Rs 15,000-18,000 annually, both from free solar electricity and selling surplus energy to distribution companies, she added.
The government announced the Pradhanmantri Suryodaya Yojana in January 2024 for rooftop solar installations in 10 million households.
Viability gap funding has also been announced for the initial addition of up to 1 GW in offshore wind energy capacity. The Union government introduced the country’s first-ever tender last year to allocate sites for offshore wind energy projects. While the country has an installed wind capacity of 43.7 GW, it is currently limited to land-based wind projects.
The budget for National Green Hydrogen Mission to develop green hydrogen has been increased to Rs 600 crore in the upcoming financial year from Rs 100 crore estimated in 2023-24.
To address the challenges of scaling up e-buses, the budget discussed support through payment security mechanisms. PSM, a capital reserve, offers interest-free capital to projects in the event of default.
While Sitharaman emphasised the e-vehicle ecosystem in the budget speech and the government’s intent to support charging infrastructure and the e-buses network, the budgetary estimate for the Scheme for Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME-India) has been reduced to Rs 2,671 crore in 2024-25 from Rs 4,807 crore in 2023-24.
FAME-India is a scheme aimed at introducing electric / hybrid transportation under the National Electric Mobility Mission Plan Scheme.
In the context of biofuels and blending, the phased mandatory blending of compressed biogas (CBG) with compressed natural gas (CNG) for transportation and piped natural gas or PNG for domestic purposes will be mandated. Although compositionally similar, CBG is produced from biomass, while CNG is a by-product of petroleum.
The budget also discussed climate resilience and blue economy. In line with this, a scheme for restoration, adaptation, coastal aquaculture and mariculture with a multi-sectoral approach will be launched, the FM stated. The concept of Blue Economy 2.0 is interconnected with the Blue Revolution, which focuses on the productivity of the fisheries sector. The budget estimate for the Blue Revolution has been increased to Rs 2,352 crore in 2024-25 from Rs 1,500 crore in 2023-24.
In terms of ministerial allocation, MoEFCC has been allocated a higher budget estimate of Rs 3,265.53 crore compared to Rs 3,079.4 crore in 2023-24. Additionally, the budget estimate for MNRE has increased to Rs 12,850 crore in the latest budget from Rs 10,222 crore in the previous year.
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