CHENNAI: Union finance minister Nirmala Sitharaman’s interim budget for the 2024–25 financial year focused on green energy projects. Announcements in the sector include coal gasification, electrification, and offshore wind projects.
The finance minister announced setting up viability gap funding (VGF) to tap the offshore wind energy potential for an initial capacity of one gigawatt (GW). Offshore wind energy projects hold huge potential but remain unfeasible due to heavy capital expenditure requirements.
According to the Energy Information Administration (EIA), offshore wind is 2.6 times more expensive than onshore projects. Experts suggest government subsidies to make the economy work.
Welcoming the move, Arindam Ghosh, Partner at Power Advisory, Nangia Andersen LLP, said the VGF for offshore projects said, "However, there is a need to streamline key agreements and processes such as sea bed leasing arrangements and methodology for selection of off-shore locations on a techno-economic feasibility evaluation."
With a coal gasification and liquefaction capacity of 100 metric tonnes (MT) by 2030, financial assistance for the procurement of biomass aggregation machinery to support collection was announced. This will also help in reducing imports of natural gas, methanol, and ammonia.
She said the phased mandatory blending of compressed biogas (CBG) with compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated.
Electric Vehicles
Nirmala Sitharaman announced the government would expand and strengthen the electric vehicle ecosystem by supporting manufacturing and charging infrastructure. She also announced a payment security mechanism for greater adoption of e-buses for public transport networks, which is one of the long-pending demands of the industry.
Mahesh Babu S, chief executive officer of Switch Mobility, the electric vehicle arm of Ashok Leyland, called it a critical measure for e-bus adoption. "The support for the electric vehicle sector, encompassing manufacturing, charging infrastructure, and bolstering payment security mechanisms, is a positive stride in fostering the widespread adoption of electric vehicles," he said.
Speaking to TNIE last August, he said the government's aim to introduce 50,000 e-buses in five years needs at least Rs 10,000 crore in financing from banks. “This will be challenging unless the government intervenes,” he said.
Bio-manufacturing and bio-foundry
The Finance Minister also announced a scheme for bio-manufacturing and bio-foundry in the interim budget. This scheme hopes to provide environment-friendly alternatives such as biodegradable polymers, bioplastics, biopharmaceuticals, and bioagricultural inputs. “This scheme will also help in transforming today’s consumptive manufacturing paradigm to one based on regenerative principles,” she said.
The Blue Economy 2.0 scheme for coastal aquaculture and mariculture with an integrated and multi-sectoral approach will be launched.