Budget 2023: Centre allocates ₹35,000 cr priority funding for energy transition

Union Finance Minister Nirmala Sitharaman, while presenting Union Budget 2023-24 in Parliament today, said the Centre will notify ₹35,000 crore priority capital investment for the country’s energy transition. Under this, she said, the battery storage will also get viability gap funding.

"We are implementing programs like green fuel, green energy etc., for efficient use of energy across economic sectors. These green growth efforts will help in reducing the carbon intensity of the economy and provide large-scale job opportunities," she said.

Reacting to the announcement, ratings agency CRISIL said: "The allocation of Rs 35,000 crore for energy transition, and viability gap funding for battery storage are much-needed steps to enable growth in renewable energy capacity additions and grid stability." CRISIL estimates that India will need at least 45 GW of energy storage capacity by 2030.

Notably, the Economic Survey 2022-23 released on January 31, 2023, also reiterated the need for giving impetus to education and skilling to with "twenty-first-century challenges such as climate change and energy transition".

The Survey highlights that initiatives to sensitise the population towards a healthy lifestyle should be continued. "Long-range plans need to be formulated to secure the necessary metals and minerals required for energy transition and diversification."

It outlines that India is spearheading "one of the world’s most ambitious clean energy transitions" and remains steadfast in its commitment to combating climate change. "Despite the adverse impacts of Covid-19 on the economy, India has enhanced its climate ambition manifold and embarked on a long-term strategy towards a Low GHG Emission Development Strategy by adopting a multi-pronged approach."

Additionally, to complement the energy transition plan, there are numerous policies initiated by the Centre to improve the ecosystem to deploy promising technological innovations, like green hydrogen, says the government. "The country has consistently modified/amended regulatory standards and adopted policy-level interventions to support the development and adoption of new technology."

The government says India’s progress on "energy transition" may be understood from the fact that it has enhanced its "non-fossil fuel based installed capacity target to 50% in its updated NDC (Nationally Determined Contribution) as the target of 40% of the first NDC was achieved well in advance.

Meanwhile, the FM also said that to realise the vision of "Make AI in India" and "Make AI work for India", three centres of excellence for artificial intelligence will be set up across top educational institutions.