Key Highlights of Union Budget for Power & Renewable Sector during 2022-23

The union Budget for 2022-22 was presented by Hon'ble Ms. Nirmala Sitharaman on 1st Feb 2022 in the parliament of India. This was the second digital Budget of India. The finance minister emphasized on how country as a whole fought COVID-19 and are still fighting. She also expressed her heartfelt gratitude towards men and women, for how they were able to carry out their work and duty, to provide for the nation’s basics, over those crucial months.

As of for the Power sector the finance minister emphasized mainly on DISCOMS and Renewable energy.

Key Highlights - Power Sector including Renewable Energy

• Implementation of the Ken-Betwa Link Project, at an estimated costof 44,605 crore will be taken up. This is aimed at providing irrigationbenefits to 9.08 lakh hectare of farmers lands, drinking water supply for 62lakh people, 103 MW of Hydro, and 27 MW of solar power. Allocations of 4,300 crore in RE 2021-22 and 1,400 crores in 2022-23 have been made forthis project.
• Considering the constraint of space in urban areas for setting upcharging stations at scale, a battery swapping policy will be brought out andinter-operability standards will be formulated. The private sector will beencouraged to develop sustainable and innovative business models for‘Battery or Energy as a Service’. This will improve efficiency in the EV eco-system
• The risks of climate change are the strongest negative externalitiesthat affect India and other countries. As Hon’ble Prime Minister said at theCOP26 summit in Glasgow last November, “what is needed today is mindfuland deliberate utilisation, instead of mindless and destructiveconsumption.” The low carbon development strategy as enunciated in the‘panchamrit’ that he announced is an important reflection of ourgovernment’s strong commitment towards sustainable development
• To facilitate domestic manufacturing for the ambitious goal of 280GW of installed solar capacity by 2030, an additional allocation of ` 19,500crore for Production Linked Incentive for manufacture of high efficiencymodules, with priority to fully integrated manufacturing units frompolysilicon to solar PV modules, will be made
• States will be allowed fiscal deficit of 4% of GSDP with 0.5% tied to their power sector reforms
• Batteryswapping policy to be put in place for urban cities that do not have space for EV charging stations
• EnergyEfficiency in commercial buildings to be promoted through ESCO model
• Sovereign GreenBonds to be issued
• 5-7% biomass pellets to be co-fired in thermal power plants resulting in carbon dioxide savings of 38 MMT annually
• 4 pilot projects for coal gasification to be set up
• EV charging provision to be part of public infrastructure to realise a dense network of charging points
• Recognisingenergy transition and climate action as pillars of development

Transition to Carbon Neutral Economy

• Five to seven per cent biomass pellets will be co-fired in thermalpower plants resulting in CO2 savings of 38 MMT annually. This will alsoprovide extra income to farmers and job opportunities to locals and helpavoid stubble burning in agriculture fields.
• Saving energy is an important aspect of energy management. Hence,energy efficiency and savings measures will be promoted. This will be donein large commercial buildings through the Energy Service Company (ESCO)business model. It will facilitate capacity building and awareness for energyaudits, performance contracts, and common measurement & verification protocol
• Four pilot projects for coal gasification and conversion of coal intochemicals required for the industry will be set-up to evolve technical andfinancial viability.
• The policies and required legislative changes to promote agroforestry and private forestry will be brought in. In addition, financial supportwill be provided to farmers belonging to Scheduled Castes and ScheduledTribes, who want to take up agro-forestry.
• Data Centres and Energy Storage Systems including dense charginginfrastructure and grid-scale battery systems will be included in theharmonized list of infrastructure. This will facilitate credit availability fordigital infrastructure and clean energy storage.
• Similarly, project import duty concessions have also deprived the local producers of a level playing field in areas like coal mining projects, power generation, transmission or distribution projects, railway and metro projects. Our experience suggests that reasonable tariffs are conducive to the growth of domestic industry and ‘Make in India’ without significantly impacting the cost of essential imports.