From solar rooftops to small nuke reactors: Union Budget envisages efforts for India's energy security

New Delhi [India], July 23 : Union Finance Minister Nirmala Sitharaman on Tuesday announced the launch of Pradhan Mantri-Surya Ghar Muft Bijli Yojana (PM Free Electricity scheme), to promote rooftop solar (RTS) installations in India by providing one crore households with free electricity for up to 300 units every month.
This announcement by the Finance Minister was in line with the Interim Budget announcement earlier this year.
"The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and we will further encourage it," Sitharaman said in her Budget 2024 speech.
Sitharaman said that during the interim budget, she had announced the government's strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability.
"We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability," Sitharaman said.
Prime Minister Narendra Modi had launched the solar rooftop scheme in February this year.
The previous government had approved the 'PM-Surya Ghar: Muft Bijli Yojana' with a total outlay of Rs 75,021 crore for installing rooftop solar and providing free electricity up to 300 units every month for one crore households.
An official press release had stated that the Centre would fund 60 per cent of the cost for installing 2 kW (kilowatt) systems and 40 per cent of the cost for systems from 2-3 kW capacity. The release said the households will apply for subsidy through the National Portal and will be able to select a suitable vendor for installing rooftop solar panels.
In her Budget 2024 speech, Sithraman proposed to exempt capital goods for manufacturing of solar panels.
Terming energy transition as critical in the fight against climate change the Finance Minister to support energy transition proposed to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country.
Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, Sitharaman said she proposed not to extend the exemption of customs duties provided to them.
Sitharaman in her Budget speech said that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable and intermittent nature in the overall energy mix.
The Finance Minister also announced a Critical Mineral Mission for the country.
She stated that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.
"We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism," the minister said.
To improve climate action funding the government will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation.
"This will support achievement of the country's climate commitments and green transition," Sitharman said.
The minister said she proposed to fully exempt customs duties on 25 critical minerals and reduce basic custom duties (BCD) on two of them. "This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors," the Union Finance Minister said in her Budget speech.
These critical minerals include antimony, beryllium, bismuth, cobalt, copper, gallium, germanium, hafnium, indium, lithium, molybdenum, niobium, nickel, potash, rare earth elements, rhenium, strontium, tantalum, tellurium, tin, tungsten, vanadium, zirconium, selenium, cadmium, and silicon (other than quartz and silicon dioxide). For silicon quartz and silicon dioxide, basic custom duty has been reduced from 5-7.5 per cent to 2.5 per cent. For graphite, BCD has been reduced from 5-7.5 per cent to 2.5 per cent.
Sitharaman said that nuclear energy is expected to form a very significant part of the energy mix to realise the ambitious goal of 'Viksit Bharat.'
The Union Finance minister said that towards that pursuit, the government will partner with the private sector for setting up Bharat Small Reactors, research and development of Bharat Small Modular Reactor, and research and development of newer technologies for nuclear energy.
The R&D funding announced in the interim budget will be made available for this sector, Sitharaman said.
The Union Finance Minister also announced the formation of a joint venture between NTPC and BHEL companies.
The two companies will establish a commercial plant using Advanced Ultra Super Critical (AUSC) technology, aiming for higher efficiency in power generation, the minister announced in her Budget speech adding that the government will provide necessary fiscal support for it.
"Moving forward, development of indigenous capacity for the production of high-grade steel and other 15 advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy," Sitharaman said.
Further, the Union Minister said that a roadmap for moving the 'hard to abate' industries from 'energy efficiency' targets to 'emission targets' will be formulated.
"Appropriate regulations for transition of these industries from the current 'Perform, Achieve and Trade' mode to 'Indian Carbon Market' mode will be put in place," Sitharaman said.
To support traditional industries, the government will facilitate investment-grade energy audit in 60 clusters, including brass and ceramics.
Financial support, she said, will be provided for shifting them to cleaner forms of energy and the implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase.