Key measures for energy sector in India’s Union Budget 2024

The 2024 Union Budget of India introduced significant measures to boost the energy sector, emphasising renewable energy adoption, energy transition, and infrastructure enhancement. Here are the key highlights:

PM Surya Ghar Muft Bijli Yojana: 10 million households will receive up to 300 units of free electricity monthly, supported by subsidies and concessional loans, with a National Online Portal for streamlined applications.

Renewable Energy Funding: The Ministry of New and Renewable Energy (MNRE) has been allocated Rs 191 billion, with Rs 85 billion designated for grid-connected solar power, reflecting a nearly 79 per cent increase from the previous year.

Infrastructure and Storage Projects: Development of pumped storage and battery energy storage systems with a 4,000 MWH capacity will be promoted through viability gap funding.

Partnerships and Technological Advancements: Plans include developing small modular reactors, advancing nuclear technology, and establishing an 800 MW Advanced Ultra Super Critical (AUSC) plant through a joint venture between NTPC Limited and Bharat Heavy Electricals Limited (BHEL).

Transmission and Green Energy Initiatives: Rs 197 billion is allocated for green energy projects, with Rs 207 billion for an inter-state transmission system to evacuate 13 GW of renewable energy from Ladakh.

Offshore Wind Energy and EV: Viability gap funding will support 1 GW offshore wind energy projects, with additional measures for electric vehicle (EV) ecosystem enhancement, including battery swapping, charging infrastructure, and incentives.

Petrochemical Sector Enhancements: The Ministry of Petroleum and Natural Gas (MOP&NG) receives Rs 1.19 trillion, marking a 6.25 per cent increase from the previous year.

Support for Ethanol Blending Programme: Basic customs duty on denatured ethyl alcohol is exempted to promote the transition to green energy.

R&D in Renewable Energy: Rs 1,000 billion fund is announced for renewable energy R&D, promoting innovation and investment.

Carbon Market Transition: A roadmap will be developed for transitioning ‘hard to abate’ industries from the ‘Perform, Achieve and Trade’ mode to the ‘Indian Carbon Market’ mode.

Energy Audit: Financial support will be provided for energy audits in 60 clusters of traditional micro and small industries to facilitate their transition to cleaner energy.

Policy Framework for Climate Finance and Minerals: A new taxonomy for climate finance will be introduced, and customs duties will be exempted for 25 critical minerals, with reductions in Basic Customs Duty for two of these minerals.