Gist of Budget 2021: Green Energy Highlights | Gist of Rajya Sabha TV / RSTV (now Sansad TV) - UPSC PDF Download

Context

Here several proposals in the budget towards enhanced use of green and clean energy has been discuss and analysed.

Background

• Budget 2021 has proposed the launch of Hydrogen Energy Mission in this fiscal year.
• Focus has been given to boost power and clean energy sectors.
• The budget provides for additional fund infusion of Rs 1,000 crore for SECI and Rs 1,500 crore for IREDA.

Summary of the Debate

Green Energy in Budget 2021

• The Budget has laid a major focus on capturing the emerging energy transition trends -- from Renewables to Hydrogen and even Smart Metering. 
• National Hydrogen Mission will be launched in 2021-22 for generating Hydrogen from green power sources.
• As part of the larger focus on ensuring clean air and environment, the budget provides for Rs 2,217 crore allocations for 42 urban centres with population of over 1 million.
• Additional resources to address the ailing power discoms as part of a new package worth around Rs 3.5 lakh crore. The revamped result-linked scheme with Rs 3.05 lakh crore outlays will be launched for implementation over 5 years.
• Rapid expansion of the national programme on smart metering and separation of agricultural feeders.
• "A National Monetization Pipeline of potential brownfield infrastructure assets will be launched, for monetizing operating public infra assets. 
• Focus on the Oil & Gas sector with increased outlay for the expansion of the City Gas Distribution (CGD) network and Ujjwala beneficiaries.
• On the lines of a Power system operation corporation (POSOCO) in power sector, budget provides for setting up an Independent Gas transmission system operator for the gas sector. 

About Hyfrogen Energy Mission

• Budget proposed to launch a 'Hydrogen Energy Mission' in 2021-22 for generating hydrogen from green power sources.
• Hydrogen produced from renewable sources has many uses and can help steer the world towards a cleaner future. But the approach to making hydrogen thus far has relied on fossil fuels. The proposed mission can help change this equation.
• India is already keen on developing a hydrogen economy. It is a participant, one among 16 nations or groupings, in the Mission Innovation Renewable and Clean Hydrogen Challenge.
• Funding agencies: Ministry of Science and Technology, CSIR laboratories, Ministry of Petroleum and Natural Gas, Defence Research and Development Organisation, Indian Space Research Organisation, and oil and gas companies are supporting projects centred around hydrogen production, storage, and utilisation for power generation and transportation applications.
• The emphasis on hydrogen in the budget is in line with the technological development in the global north and with a long-term vision towards reduced dependency on minerals and rare-earth element-based battery as energy storage.
• Green hydrogen energy is vital for India to meet its Nationally Determined Contributions and ensure regional and national energy security, access and availability. Hydrogen can act as an energy storage option, which would be essential to meet intermittencies (of renewable energy) in the future.

Significance Of Hyfrogen Energy Mission

• This is a key move, as it finally tries to create a major demand generator for renewable energy, for production of green hydrogen. Of course, the real impact will be long term, but at least the country is trying to catch up with the rest of the world with initiatives in the space.
• Green Hydrogen Mission is not only essential to decarbonise heavy industries like steel and cement, it also holds the key to clean electric mobility that doesn’t depend on rare minerals.
• Hydrogen from renewable power is technically viable today and is quickly approaching economic competitiveness.
• Hydrogen with its abundance, high energy density, better combustion characteristics, nonpolluting nature etc, has vast advantages over the conventional fuels.
• A 'Hydrogen Valley Platform' is also in the works that will look to create an integrated hydrogen ecosystem covering production, storage, distribution and end use.
• Vehicles powered by hydrogen are said to be best-suited for use in the long-haul, heavy transport, and commercial fleets. 

How to Boost Power & Clean Energy Sectors

• The COVID-19 disruption left the power sector gasping for breath, especially the renewable energy segment. 
  • Given the significance of power industry in the Indian economy budget has focused on this sector.
• The troubled distribution companies, or discoms, need to look forward to prompt implementation of the liquidity scheme. 
  • It wants long-term measures to help strengthen the transmission and distribution to prepare it for future.
• The solar power industry is also worried about the proposed basic customs duty (BCD) on solar modules. 
• Need to develop R&D in manufacturing efficient modules domestically at competitive prices.
• Solar energy sector wants a reduction in GST rates and a simplified tax structure. "Any taxes, duties like GST that is imposed by the government in fact result in increase in generation cost of electricity. 
  • This in turn causes a cascading increase in the manufacturing or cost of living. And, therefore, is counter-productive to national growth. 
• Wind power producers are looking forward to an end to restrictions on raw materials for wind turbines and tax relaxations under the Income-tax Act.
• Power distribution companies are currently monopolies, whether public or private. There is a need to provide choice to consumers. 
  • There should be a framework to give consumers alternative of more than one discom.

Conclusion

Budget 2021 has laid out a roadmap for utilization of green energy or clean energy in the near future from here onwards and also how it will help us in reducing the carbon footprint. It benefits us not only from the climate change of view but also perhaps when it is developed on the economy of scale in terms of cost benefits as well. 

Facts

• The sector has become key driver for capacity addition in the power sector. 
• India plans to scale its renewable energy capacity to 175GW by 2022, including 100GW of solar and 60GW of wind energy.
• India has already installed over 90GW of renewables, including 37GW of solar and 38GW of wind energy. Meanwhile, projects for another 50GW are in the pipeline. 
• The target of 175GW by next year will require investments to the tune of Rs 1.75 lakh crore.