PANCHAMRIT is mentioned in Indian scriptures as a holy concoction of five elements for immortality. At the UN Climate Change Conference in Glasgow (COP26) in November 2021, Prime Minister Narendra Modi set the tone for India's climate action plan for achieving net zero emission target by 2070, when he proposed a 'Panchamrit' of five goals-500 GW renewable energy capacity, 50% energy from non-fossil fuels, one billion tonne carbon emission reduction, bringing down carbon intensity of economy to 45% (all by 2030), and from there, transitioning to net zero emissions by 2070. Later, he came up with a vision for LiFE, or Lifestyle for Environment, starting a movement for adoption of an environmentally conscious lifestyle.

Finance minister Nirmala Sitharaman set in motion the process of implementing the prime minister’s sustainable growth and energy transition vision in her first Budget in 'Amrit Kaal', a vision for India's growth for next 25 years. She brought in another word from scriptures, Saptarshi (seven sages), to focus on seven priority growth engines, one of which was green growth.

“The FY24 Budget appears to have ushered in a phase of green transition, guiding the economy towards a sustainable development pathway. By focusing on initiatives to increase energy efficiency and lower carbon intensity, it demonstrates a commitment to fostering green growth," says Satish Kumar, president & executive director, Alliance for an Energy Efficient Economy. "The increased outlay for energy transition, particularly for green hydrogen and waste-to-energy, and Pranam scheme and bio-input centres, will incentivise sustainable and regenerative agriculture practices," says Anjali Bansal, founder, Avaana Capital, a climate change fund.

The Budget has proposed several measures to push the green agenda. These include Green Credit Programme under Environment (Protection) Act; PM-Pranam for promoting alternative fertilisers and balanced use of chemical fertilisers; 500 ‘waste-to-wealth’ plants under GOBARdhan scheme; 10,000 Bio-Input Resource Centres; help to over one crore farmers for adoption of natural farming in three years; mangrove plantations along coastlines and on salt pan lands; scheme for optimal use of wetlands; promotion of energy-efficient coastal shipping; and schemes to promote electric vehicles and scrapping of old vehicles. Experts say these assume significance in the backdrop of the country hosting G20 leaders’ summit in September. India’s theme for G20 is “One Earth, One Family, One Future.”

"We are implementing programmes for green fuel, green energy, green farming, green mobility, green buildings and green equipment, and policies for efficient use of energy across sectors. These green growth efforts will reduce carbon intensity of economy and provide large-scale green job opportunities," she said while introducing the Budget for 2023-24. The Budget has allocated ₹10,222 crore for renewable energy sector, 48% higher than last year's ₹6,900 crore and 45.3% more than the revised estimate of ₹7,003 crore.

One of the major announcements was provision of ₹35,000 crore for priority capital investments by Ministry of Petroleum & Natural Gas for meeting net zero objectives. PSU energy companies Indian Oil, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum (HPCL) had announced their net zero targets last year. Indian Oil’s target of 2046 will require an investment of ₹2 lakh crore. BPCL (investment ₹1.6 lakh crore) and HPCL (₹1 lakh crore) are targeting net zero emissions by 2040. They plan to increase biofuel sales, set up EV charging stations and develop green technologies like hydrogen. The finance minister also exempted basic customs duty on denatured ethyl alcohol to support the ethanol blending programme.

The plan to set up 200 compressed bio-gas plants and 300 community and cluster-based biogas plants also demonstrates a commitment towards building a sustainable ecosystem, says Raghunath K., country representative, Thyssenkrupp India. "Globally, India ranks fourth in installed renewable energy capacity and Budget will give a fillip to addition of capacity in areas such as wind and solar," says Anil Chaudhry, zone president, India, and CEO & MD, Schneider Electric.

The Budget has also proposed viability gap funding for energy storage systems with a capacity of 4,000 MWh (megawatt hour) and extension of customs duty exemptions for capital goods and machinery required for making lithium-ion batteries. Development of a battery ecosystem will be important for grid stabilisation and uninterrupted power supply. India Energy Storage Alliance has estimated that annual demand for energy storage market will grow from under 10 gigawatt hour (GWh) to over 50 GWh by 2025 and over 150 GWh by 2030. As per NITI Aayog, India’s battery storage market is expected to reach more than 1,000 GWh by 2030, a cumulative market size of $250 billion. Of this 1,000 GWh, power sector demand alone is expected to be close to 150 GWh, translating into $60 billion capital investment, says Sumant Sinha, chairman and CEO, ReNew Power. "For the total 1,000 GWh capacity deployment, we will need investment of $16.5 billion in manufacturing over five-six years. This will translate into capacity of around 150 GWh per annum," says Sinha. In July 2022, government had approved the Production Linked Incentive (PLI) Scheme, National Programme on Advanced Chemistry Cell Battery Storage, for manufacturing capacity of 50 GWh. The Indian lithium-ion battery market was valued at $1.66 billion in 2020, and is expected to reach $4.85 billion by 2027, a CAGR of 17.23% between 2022 and 2027, says a Mordor Intelligence report.

The government also intends to build an interstate power transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh with an investment of ₹20,700 crore, including Central support of ₹8,300 crore. The plan is to develop Ladakh, which is sparsely populated but gets good sunshine throughout the year, as a solar power hub. The potential of the region is estimated to be over 30 GW. Government intends to set up 10 GW solar fields between Spang and Zara Dho. Earlier, Solar Energy Corporation of India had floated a tender for 7.5 GW solar fields in Leh and Kargil but had to cancel it due to lack of interest from developers worried about absence of power evacuation infrastructure. Sources say Power Grid Corporation of India has completed surveys for laying transmission lines from Kaithal in Haryana to Spang in Ladakh to bring power to Delhi-NCR and from Spang to Leh to power Kashmir valley.

In hydropower, the finance minister proposed a framework for pumped storage projects. Pumped storage hydropower (PSH) involves linking two reservoirs at different elevations to generate power as water moves down from one to the other. The system requires power for pumping water back into the upper reservoir. In India, PSH potential is estimated to be 120 GW, across 120 sites. Only nine plants with installed capacity of 4.7 GW are operational while three, with capacity of 2.7 GW, are under construction. Attracting investments in PSH can discourage construction of huge dams and minimise environment damage. Also, a proposal to replace old and polluting vehicles owned by government will make scrapping centres more viable, says Manish R. Sharma, partner and leader, Capital Projects & Infrastructure, PwC India.

However, the Budget did not address some major industry demands like PLI scheme for makers of wind turbine generators, devices, electrolysers and related equipment. The industry was also demanding reduction in import duty on electrolytes and imposition of green hydrogen purchase obligations. "Wind turbine makers were expecting inclusion in PLI. Also, there are no special benefits for FDI in wind turbine manufacturing. However, the CCDC (concessional custom duty exemption certificate) benefit has been extended up to 2025, which is a bit of relief," says P.K.C. Bose, vice chairman and MD, Enercon.

In a nutshell, Budget proposals will go a long way in decarbonising the Indian economy, says Debasish Mishra, partner and leader, Energy, Resources and Industrials, Deloitte India.

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