Union Budget 2024-25 focuses on energy security and green energy transition

The Union Budget 2024-25 focuses on enhancing energy security and advancing the country’s energy transition goals. It demonstrates a commitment to promoting cleaner and affordable power generation from conventional sources of power, while significantly expanding renewable energy. The budget emphasises solar expansion under the PM Surya Ghar Muft Bijli Yojana, and introduces customs duty exemptions for goods used in the production of solar cells and panels. Additionally, efforts are being made to strengthen energy storage and nuclear power development, with proposed policies supporting pumped storage projects (PSPs), and encouraging research and private sector participation in indigenously developed small modular reactors.

Focus on solar power

 In the budget speech, the finance minister noted that, in line with the announcement in the interim budget, the PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants, install rooftop solar, which will enable 10 million households to obtain free electricity of up to 300 units every month. The scheme has generated a remarkable response, with more than 12.8 million registrations and 1.4 million applications received so far. The 2024-25 budget has provided a budgetary allocation of Rs 62.5 billion to the PM Surya Ghar Muft Bijli Yojana according to the expenditure budget document.

 Policy to support pumped storage power

 Another focus area of the union budget is the pumped storage segment, which is essential for providing energy storage given the growing integration of renewable energy. The budget has announced that a policy will be introduced to support pumped storage projects (PSPs), aimed at enhancing electricity storage and enabling the smooth integration of the increasing share of variable and intermittent renewable energy into the overall energy mix. 

 With their long-duration storage capabilities, PSPs have received significant attention in recent years from both the private and public sectors due to the growing power generation from renewable energy sources. A policy document for the PSP segment is likely to incentivise the segment and accelerate the development of such projects going forward.

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