Union Budget 2022-23 focuses on enabling energy transition and promoting clean energy growth

As a part of the Union Budget, the finance minister has announced several key measures for enabling energy transition and promoting clean energy growth.

For 2022-23, the net budgetary allocation for the Ministry of Power (MoP) has been Rs 160.74 billion (as against Rs 153.22 billion in 2021-22) while the Ministry of New and Renewable Energy (MNRE) has been allocated Rs 69.01 billion (as against Rs 57.53 billion in 2021-22).For electric vehicles (EV), the union minster has proposed that come out with a battery-swapping policy and formulate inter-operability standards. The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. To facilitate domestic manufacturing of 280 GW of installed solar capacity by 2030, an allocation of Rs 195 billion has been made for production linked incentive for manufacture of high efficiency modules, with priority to fully integrated manufacturing units from polysilicon solar photovoltaic (PV) modules.Co-firing of five to seven per cent biomass pellets in thermal power plants has been proposed by union minister that will result in CO2 savings of 38 mmt annually. This will also provide extra income to farmers and job opportunities to locals and help avoid stubble burning in agriculture fields. Apart from this, four pilot projects for coal gasification and conversion of coal into chemicals required for the industry have been proposed to evolve technical and financial viability.As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy. The government has also announced enhanced financial support for setting up distributed RE projects in border villages under a Vibrant Village Programme. Apart from this, energy efficiency and saving will be promoted in large commercial buildings through Energy Service Company.