Going green – Analyzing the Budget Allocation for Green Energy Transition | 4th February 2023 | UPSC Daily Editorial Analysis

What's the article about?

• It talks about the amount allotted and initiatives taken to make the transition to green alternatives from the current reliance on fossil fuels in the recent Union Budget.

Relevance:

• GS3: Government Budgeting; Science and Technology; Energy Security;
• Essay;
• Prelims

Context:

• Recently Finance Minister Nirmala Sitharaman presented the Union Budget for 2023-24 in Lok Sabha.
• This Budget provides 35,000 crores for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum & Natural Gas.
• Thus, the latest Budget shows the government’s commitment to move towards net-zero carbon emission by 2070.
• It is now realised globally that India holds the key to hitting global climate change targets given its sizable and growing energy needs.
• With the country’s population set to overtake China’s some time this year, India’s appetite for energy to propel the economy is set to surge exponentially.
• The transition to green alternatives from the current reliance on fossil fuels is therefore an urgent imperative and an opportunity to leverage this move to catalyse new industries, generate jobs on a sizable scale, and add to overall economic output.

Analysis:

• Budget 2023-24 devoted a fair amount of space to the green industrial and economic transition needed. Following broader areas are covered by Budget to ensure the green energy transition:
• Electric Vehicle (EV):
  • Both demand and manufacturing of EVs is growing. But to ensure further growth of the EVs, the availability of indigenously produced lithium-ion batteries has become a necessity.  
  • This is also necessary to keep the cost of EVs lower.
    The Budget hearteningly proposes to exempt customs duty on the import of capital goods and machinery required to manufacture lithium-ion cells used in EV batteries.
  • This ought to give a fillip to local companies looking to set up EV battery plants.
• Battery Energy Storage Systems:
  • Without sufficient battery energy storage systems, the expansion of renewable sources of energy is quite difficult and meaningless.
  • The Budget understood this and thus it proposed the establishment of a viability gap funding mechanism to support the creation of battery energy storage systems with a capacity of 4,000 MWh.
  • Energy storage systems are crucial in power grid stabilisation and essential as India increases its reliance on alternative sources of power generation including solar and wind.
  • With wind turbine farms and solar photovoltaic projects characteristically producers of variable electric supply, battery storage systems become enablers of ensuring the electricity these generators produce at their peak output is stored and then supplied to match the demand arriving at the grid from household or industrial consumers.
• Transmission of green energy:
  • Budget also allotted a fair amount for building an inter-State transmission system for the evacuation and grid integration of 13 GW of renewable energy from Ladakh.
  • With its vast stretches of barren land and one of the country’s highest levels of sunlight availability, Ladakh is considered an ideal location to site photovoltaic arrays for producing a substantial capacity of solar power.
  • The transmission line will help address what had so far been the hurdle in setting up solar capacity in the region, given its remoteness from India’s main power grid.

Way Forward:

• A switch from fossil fuel-based energy systems to green energy systems is urgently required to meet the government's aim to achieve net-zero carbon emissions by 2070. The initiatives taken by the government in this year's budget are greatly appreciated.