The Union budget comes at a crucial juncture as India needs to accelerate its pace in renewable energy capacity addition and adoption of new-age green technologies in a bid to achieve its ambitious energy transition goals. It is expected to continue the emphasis on climate and energy transition.
The withdrawal of the US, under Donald Trump’s presidency, from the Paris Climate Agreement and key climate commitments also poses a challenge to global energy transition goals. It would be important to see how the Centre navigates the need for capital for energy transition to achieve its climate goals as the world’s largest economy moves towards more fossil fuels — oil and gas.
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On the domestic front, the energy space still has a long way to go in terms of adding renewable capacity and resolving key issues, including a lag in signing power purchase agreements (PPA) and power sale agreements (PSA), which has slowed the progress in development of new projects.
Further, green hydrogen projects have suffered amid a lack of interest both in the domestic and foreign markets for the green molecule. This is a cause of concern, which the government may try to address in the upcoming budget.
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As it has tried to boost domestic manufacturing of solar modules and cells through production linked incentive schemes and high customs duties, more steps may be in the offing to boost local industry in the green energy space.
