Budget 2024: What are power sector's expectations from FM Nirmala Sitharaman?

Budget 2024: With anticipated economic growth and energy transition, India’s power sector is at the forefront of the government’s focus. The country aims for 500 GW of renewable energy by FY30 and 85 GW of additional thermal capacities by FY32. ET looks at the challenges and budget wish list of the sector.

State of Play
India’s current installed power capacity is 444.75 GW of which 54.6% is thermal, while the rest are clean sources of energy.

Key issues
The power sector faces several critical challenges that require immediate attention. One major issue is the need to increase capacity to meet the rapidly growing electricity demand. Additionally, expanding and reinforcing the transmission system is essential to support this increased capacity. Reducing lead times for adding thermal capacity and ensuring the timely supply of necessary equipment are also pressing concerns. Enhancing grid stability while bringing down technology costs is crucial for maintaining a reliable power supply. Finally, ensuring supply chain stability and adopting new technologies are vital for the sector's long-term sustainability and efficiency.

What should the budget do
The upcoming budget should focus on several key areas to enhance the power sector. It should provide incentives for energy transition technologies, encouraging the adoption of cleaner and more efficient energy solutions. Additionally, efforts in carbon capture and utilisation should be incentivised to reduce emissions. A significant push for investment in transmission and distribution infrastructure is necessary to improve the efficiency and reliability of power delivery. Furthermore, offering incentives for coal gasification projects can help diversify energy sources and reduce dependence on traditional coal-burning methods.