In the power sector, industry players will be closely tracking the announcements to promote renewable-energy production, and more efficient transmission and distribution, in the upcoming Union Budget.
On February 1, the Finance Minister Nirmala Sitharaman will announce the Union Budget 2025-26. Though power-related initiatives are rolled out throughout the year, analysts and industry insiders will be listening in to see if any special mentions are being made for the renewables sector, particularly for storage solutions, and on smart metering.
In the previous Budget, the Ministry of New and Renewable Energy (MNRE) saw its allocation surge to Rs 19,100 crore, 143 percent higher than the revised estimate for 2023-24. This increase was largely attributed to the PM Surya Ghar Muft Bijli Yojana, which aims to encourage solar-power consumption by households.
Satyajit Jain of Ambit told Moneycontrol that the subsidy was expected to help achieve 30 GW of rooftop solar capacity in two to three years. He added, "As renewable energy grows, the demand for storage solutions becomes even more critical."
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The other focus in the power sector has been on better transmission and distribution solutions, through smart metering. Shivam Bajaj of Avener Capital told Moneycontrol that increased capital expenditure is the need of the hour.
He said, “In the Transmission and Distribution (T&D) segment, the main challenge has been the slow pace of project execution and capital expenditure. Increased CAPEX allocations could accelerate these projects, particularly on the renewable energy side".
Thermal power
Traditional power-generation segments are looking for more support for domestic manufacturing of thermal power equipment.
JM Financial’s Sudhanshu Bhansal said that the government aims to add 80 GW of power generation capacity over the next 5-6 years.
“Last year, a special grant was announced for advanced supercritical thermal power plants. While the plans are clear, the main concern lies in capacity addition. Domestic manufacturing capabilities are lacking, creating complexities. Incentives may be introduced to encourage companies to restart manufacturing thermal power equipment,” he said.
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