Budget 2023 Offers No Surprises, Focus On Continuity

With the budget presented, it’s time to make a quick assessment of what it had for the renewable energy sector. With Green growth made a key pillar of the 7 focus areas for the government, it does seem like the government is looking at a broader push like enabling ease of doing business, skilling, rather than specific incentives and sops for the sector anymore.

With multiple PLI schemes kickstarted across module manufacturing, batteries, and now probably green hydrogen as well, there were no fresh investment announcements, other than a specific Rs 20,700 crore plan for developing reneweable power in Ladakh. The latter has been a project stuck for some time now, mainly due to issues linked to cost of transmission and environmental impact, besides suitable land. The specific allocation indicates a clear focus to get the project going.

A broader Rs 35,000 crore allocation for the energy transition was also highlighted, even though that is supposed to be routed through entities under the Ministry of Petroleum and Natural Gas, which would again indicate investments more in the bio fuels space possible, and perhaps Compressed Bio Gas and some energy storage.

Support in the form of viability gap funding has been promised for battery storage upto 4000 mWh, with action promised for pumped storage too. Details will indicate whether this is a kickstarter plan or the government plans to provide support for capacities upto the first 20 GWh or so.

There was no change in the duty regime for the sector, with the exemption for imports of machinery involved with Lithium Ion battery manufacturer continuing, and no new news on the BCD regime seen as stymying solar growth right now. It does look like the government has placed its bets on domestic manufacturing catching up with demand as well as offering more competitive prices in due course.

In due course, a 5% CBG (compressed bio gas ) mandate will be introduced for all orgs marketing natural gas. Compressed Bio Gas back in focus after a dissappointing  beginning so far.

The Budget has also placed an emphasis on encouraging circular economy. The Govardhan Scheme is a step towards this and will see an investment of Rs 10,000 crores. 500 new waste to wealth plans will be included in the Scheme. A green credit program is also in the offing and to be notified soon. The FM has shared that low-carbon intensity and green economy will be a focus area. In the wake of such initiatives, a large number of green jobs will be created.

Earlier, the Economic Survey had also indicated that the country/government had done enough to meet its obligations and taken initiatives on the green energy front that have delivered. It is now up to the global community, especially first world nations, to setup up and meet their promise to support with financing.

With key decisions like GST rates, or central assistance effectively taken out of the purview of budget announcements, we believe announcements will be made as and when the government senses the need going ahead.