On Jul 22, 2024, the Finance Minister, Ms Nirmala Sitharaman presented the union budget for 2024-25. A number of new announcements were made in the energy sector. A new pumped storage policy was announced along with the promise to push for more pumped storage as a way to mitigate intermittency of renewable energy. For similar reasons, the finance minister also announced a push for more small scale nuclear reactors with the announcement of the use of R&D budget for development of Bharat small modular reactor.
There continues to be support for coal mining and coal-based electricity production. A new joint venture has been announced between NTPC and BHEL to establish a commercial plant using Advanced Ultra Super Critical (AUSC) technology. Support for Renewable Energy has increased with a lot of funding for PM Surya Ghar Muft Bijli Scheme and for domestic manufacturing of solar PV panels. Additionally, there has been an announcement of a Critical Minerals Mission to offset the dependence on import of minerals needed for renewable energy.
This budget has also seen a big jump of 60% for petrochemicals in its total allocation for Central Public Sector Enterprises in the petroleum sector, a 60% jump from the previous year’s allocation. The petrochemical industry is one of the most carbon intensive industries and according to the International Energy Agency, emissions from the chemical and petrochemical amounts to around 1.5 GtCO2, which is 18% of all industrial-sector CO2 emissions, or 5% of total combustion-related CO2 emissions. An increase in petrochemical industry output will also mean an increase in single use plastics and hazardous polymers both of which will aggravate the environmental, social and climate problems faced by our country.
A more detailed analysis of the budget on the Energy Sector will be included in the next month’s Energy Matters
— Energy Team at CFA
Read the full issue here : Energy Matters | July 2024