Government Allocates Rs 19,500 Crore For Solar PLI Schemes In Budget 2022-23

By Shailja Tripathi February 01, 2022

Finance Minister Nirmala Sitharaman also announced four pilot projects for coal gasification along with other green schemes.

Government Allocates Rs 19,500 Crore For Solar PLI Schemes In Budget 2022-23

In a major push for India’s renewable energy sector, Union Finance Minister Nirmala Sitharaman on Tuesday announced an additional allocation of Rs 19,500 crore towards Production-Linked Incentive (PLI) schemes related to solar modules in Union Budget 2022-23.

‘‘To facilitate domestic manufacturing for the ambitious goal of 280 GW of installed solar capacity by 2030, an additional allocation of 19,500 crore for Production-Linked Incentive for the manufacture of high-efficiency modules with priority to fully integrated manufacturing units from polysilicon to solar PV modules will be made,’’ Sitharaman said in her Budget speech.

The finance minister also announced four pilot projects for coal gasification, an oxidation process that converts coal to energy.

Talking about the gravity of the climate crisis, Sitharaman said, "The risks of climate change are the strongest negative externalities that affect India and other countries.” She went on to quote Prime Minister Narendra Modi and his speech at COP26 held in Glasgow last year, and added, "What is needed today is mindful and deliberated utilisation instead of mindless destructive consumption". At COP26, India had committed to net-zero transitions by 2070.

While hailing the inclusion of climate action and energy transition in the development pathway, Prarthana Borah, director, CDP India, says that the Budget could have included more initiatives. “In terms of resources and scale, four pilot projects for conversion of coal to energy are being launched. I think we need more ambition here considering the extent of climate risk we are going to face and the emergency around it. Solar, of course, continues to be the primary focus which is positive in terms of resources being allocated for facilitating transition,” says Borah.

Sitharaman also touched upon the air pollution caused by stubble burning and said that 5 to 7 per cent of biomass pellets will be co-fired in thermal power plants resulting in carbon dioxide savings of 38 million metric tons annually.

The move, however, will need a more defined push. RR Rashmi, distinguished fellow, TERI, says, “Mandating 5 per cent of biomass use in thermal plants may go a long way in solving the stubble burning problem. But it will need an appropriate price signal from the users to succeed and gain farmers’ acceptance.”

Commenting on the green initiatives in the Union Budget, Shailly Kedia, senior fellow and associate director at TERI, says, “It's a good beginning. Targets of any kind help set goals. It is heartening to see the mention of CO2 savings this year in the Union Budget as it helps to drive ambition for the country in this regard.”