Budget 2023: Allocation for renewable energy up 48 percent

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Union Finance Minister Nirmala Sitharaman on February 1 allocated Rs 10,222 crore toward the renewable energy sector in the Union Budget 2023. The outlay is an increase of 48 percent over last year’s allocation of Rs 6,900.68 crore (budget estimate) and 45.3 percent over the revised estimate (RE) of Rs 7,033 crore.

Announcing "green growth" as one of the seven priority sectors for the government, Sitharaman said, "We are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing carbon intensity of the economy and provides for large-scale green job opportunities."

This allocation comes at a time when India has set a target to have an installed capacity of 500 GW by 2030.

Besides, renewable energy capacity will also be needed to implement India’s Green Hydrogen Mission for which the government has allocated Rs 297 crore in the Budget. The Union Cabinet approved the National Green Hydrogen Mission on January 4 with an initial outlay of Rs 19,744 crore, of which Rs 17,490 crore will be for the production-linked incentives for producing green hydrogen and manufacturing electrolysers. Senior officials from the ministry of new and renewable energy (MNRE) said the outlay of Rs 19,744 crore will be rolled out over a period of five years or so.

An analysis of the yearly budgetary allocation (BE) for the reewable energy sector since 2014-15 showed that in the year when Prime Minister Narendra Modi took charge, the outlay was Rs 956.39 crore. In 2015-16, the allocation was the lowest at Rs 303.21 crore. In 2016-17, as the government started focusing on solar energy, and the funds were drastically increased to Rs 5,035.79 crore.

Budget allocation for the ministry of new and renewable energy (MNRE) since 2015.

India has achieved 165.94 GW of renewable energy capacity till October 2022 as against the target of 175 GW by 2022. "Against the target of achieving 175 GW of renewable energy installed capacity by 2022, a total of 165.94 GW of renewable energy capacity (including large hydro) has been installed in the country as on October 31, 2022," Power and New & Renewable Energy Minister R K Singh said in a written reply to Lok Sabha on December 8 last year.

A capacity of 76.13 GW (of renewables) is under various stages of implementation and a capacity of 36.44 GW is under various stages of bidding, Singh informed the House.

Rajat Seksaria, CEO, ACME Group said for the first time "green growth" has been identified as one of the "Saptarishi" priorities. "We are encouraged that the Union Budget provides for allocations that were announced in Tthe National Green Hydrogen Mission. The Union Budget has focused on policy consistency and reinforced the commitment towards renewable energy. The announcements on battery and pump storage would offer the impetus for the projects to take-off. The grid connectivity offered for renewable projects in the Ladakh region will open a new arena. Overall, the steps will accelerate the energy transition and help India move towards its net-zero carbon emission target," he said.

Overall, the total installed capacity of non-fossil fuel-based energy resources in the country stood at 172.72 GW as on October 31, 2022, which includes 119.09 GW of renewable energy, 46.85 GW of large hydro and 6.78 GW of nuclear power capacity. This is about 42.26 per cent of the total 408.71 GW installed generation capacity in the country as on October 31, 2022.