Green Energy Initiatives in Budget 2021

Green Energy Initiatives in Budget 2021

The Union Budget 2021 outlined reforms and initiatives towards boosting the non-conventional energy sector in India. These initiatives are in line with the ambitious renewable energy targets of achieving 450 GW by 2030, set by Prime Minister Narendra Modi.

What is Green Energy?

Green Energy is the conversion of solar, thermal, ocean, or geothermal energy into another form of usable energy. Green energy has a very minimal impact on the environment and provides the highest environmental benefit. It is also one of the fastest-growing sectors due to concerns such as global climate change, pollution, depletion of non-renewable resources, and excessive use of energy worldwide.

Present installed capacity of India:

The solar power capacity addition in India has been impressive so far. The cumulative capacity of 36.9 GW commissioned till November 2020 is higher than the target set for the year (35 GW). Further, around 36 GW capacity is under installation as of date, and an additional 19 GW of tendered projects are awaiting financial closure.

The Ministry of New and Renewable Energy mentions 38.6GW of Wind energy power plants has commissioned till December 2020. The MNRE also mentions around 10 GW of Biomass-based power plants has commissioned. On an average, the renewable energy installed capacity till December 2020 stands above 91GW.

Need to focus on Green Energy:

Green energy will reduce India’s oil import bill drastically. India currently imports 84% of its oil needs. If India enhances its green energy capacity then the oil import bill of India will come down drastically.

India is pursuing a mix of energy policies, including renewable sources like wind and solar power. These sources will provide green energy that will reduce the level of pollution in India greatly. Also for the future, these clean energies are becoming cost-effective.

Clean and eco-friendly energy is quickly becoming a priority for Indian families. The country’s growing economy has led to increased industrialization and urbanization, which have both contributed to an increase in air pollution.

India’s international commitments. India being a party to Paris Climate Agreement 2015, submitted its Nationally Determined Contributions (NDC). In this India promised to increase the share of non-fossil fuels-based electricity to 40 per cent by 2030. So the focus on green energy is much needed.

The failure of global commitments. The year 2020 was supposed to be the year by which developed countries of Paris Agreement were about to fulfil the goal of jointly mobilizing US$ 100 billion a year for climate finance. But it has not materialized. So India has to invest on its own and not rely on the global community as India is one of the most vulnerable countries to Climate Change.

Current capacity is insufficient to meet India’s target of 450 GW renewable energy by 2030. India at present has the capacity to produce 2-3 GW solar PV (Photo Voltaic) per year. But to achieve the target of 450 GW, India needs to have at least 30 to 40 GW manufacturing capacity of renewable energy per year.

Challenges faced by green energy initiatives

India is the fifth-largest producer of solar power after China, the United States, Japan and Germany. It has the potential to leapfrog over its competitors and become a global leader in manufacturing solar equipment.

Green energy sources like solar, wind, etc., are primarily dependent on weather conditions. If the favourable weather conditions are not available, it becomes inefficient and inconvenient.

Most green energy plants occupy large areas. Land acquisition in India to implement projects is one of the worst-ranked factors in Ease of Doing Business Report of the World Bank. Apart from that, there is also an issue of the cost of the vast land area.

The coal-based power plants require an initial investment of about Rs. 4 crores per MW, the investments required for solar and wind energy plants are even much higher.

Despite government’s incentives like installation of solar water heaters at home and solar pumps under KUSUM scheme, etc, the penetration of EVs, solar and other green energy initiatives are very low.