Budget 2023: Energy transformation got strength from allocation
Finance Minister Nirmala Sitharaman has announced various policies for green economy. Making green development an integral part of Amrit Kaal is the next 25-year dream of the BJP-ruled central government.
Green industry and economic transformation in line with the country’s net zero 2070 and related climate targets have been promoted in the Union Budget.
Record amounts of budgetary funding have been committed for energy transition, which will be a key driver of the economy’s transformation to reduce carbon emissions and move towards greener fuels and greener energy sources.
In his budget speech, Sitharaman said, “In this budget, Rs 35,000 crore has been earmarked by the Ministry of Petroleum and Natural Gas for priority capital investments for energy transition and net zero objectives and energy security.”
The Center relies on the oil ministry, which naturally has access to most fossil fuels, to steer the country’s energy transition.
According to the expenditure budget of the Ministry of Petroleum and Natural Gas, oil marketing companies (OMCs) will receive Rs. 30,000 crore and the balance earmarked for strategic oil reserves. Expected capital expenditure for oil marketing companies
Focus on modern day fuels – green hydrogen, ethanol and other biofuels.
Oil companies are currently working on a comprehensive plan to increase green hydrogen production. Under the newly announced Rs 19,000 crore green hydrogen drive, green hydrogen will be compulsorily procured for various sectors, including refineries.
Oil marketing companies have also started producing ethanol from bio-residues and agricultural waste. The project is in line with the Center’s long-term goal of blending ethanol with petroleum at higher volumes. Retail sales of E20, or petroleum with a 20 percent ethanol blend, will begin April 1.
To further boost investor interest, Battery Energy Storage System (BESS) and Driven Storage projects of up to 4,000 MW capacity will be supported through Viability Gap Funding (VGF).
Central assistance of Rs 8,300 crore has been announced for inter-state transmission system under construction at a cost of Rs 20,700 crore for offloading 13 GW of renewable energy from Ladakh and grid integration. Finance Minister Sita Raman has also announced the Green Loan Scheme under the Environment (Protection) Act.