"Green" India Budget 2022

The Indian Budget 2022 is supportive of green energy investments in India. The country has already announced to achieve net-zero carbon emission by 2070, at the global climate meeting in Glasgow last year. India is now targeting to reach the non-fossil fuel-based capacity of 500 GW from the earlier expected level of 450 GW by 2030. The country expects to achieve 50% of its energy requirement from renewable sources by 2030.

Important Renewable Energy Highlights for Budget 2022:

• The inclusion of energy storage systems under the infrastructure category.
• To introduce sovereign green bonds for public sector projects to reduce the carbon intensity of the economy.
• Blended finance to be promoted for climate action, agriculture, and other clean technology.
• The overall investment size to meet the target of 500 GW capacity by 2030 has been estimated in the range of Rs 20-22 trillion.
• The transmission network and storage capacity could further entail investments worth Rs.12-15 trillion.
• The outlay in the PLI scheme was further enhanced by Rs 195 billion.
• Increased capital expenditure allocation to 6%-6.5% for FY2023 should also boost energy demand growth.

The government now has a strong focus to make India “Atmanirbhar” and has implemented meaningful plans like PLI, CPSU, BCD, etc. to encourage domestic manufacturing of solar cells/ panels. The Budget of 2022 is also welcoming towards the renewable energy sector. For instance, the inclusion of storage into the infrastructure category would encourage investments in storage systems by facilitating the credit availability towards it. The introduction of sovereign gree bonds would also enable meeting funding requirements in renewable energy investments in a cost-competitive way. The Budget is also supportive of electric vehicle adoption.