India needs to invest more in the sector for capacity building and adoption of new technologies. Hence, adequate funding would be very crucial to provide the desired momentum to the sector, writes Arif Aga, Director, SgurrEnergy.
To provide further push to Renewable Energy sector, India needs to provide more funding along with further regulatory and policy push. The Indian government’s upcoming Union Budget on February 1, 2025 is expected to play a catalyzing role in fostering the growth of renewable energy. The sector expects that the government will further increase the budgetary allocations to the sector to meet its ambitious goals to achieving a 500 GW of non-fossil fuel energy which has been aligned with the ‘Panchamrit’ goals set by Prime Minister Narendra Modi.
For capacity building and adoption of new technologies, India needs to invest more in the sector. Hence, adequate funding would be very crucial to provide the desired momentum to the sector. Even though private sector has been infusing huge funds to capitalize the government’s thrust to the sector and its unquantified potential, however, higher public spending and scaling up previous year’s funding would go long way to create a robust ecosystem in the country.
In the previous year’s budget (2024-25), the Ministry of New and Renewable Energy, Government of India had allocated INR 19,100 crore, an increase of 143 percent over the revised estimate for 2023-24. This significant increase was mainly driven by allocation towards PM Surya Ghar Muft Bijli Yojana. The scheme was approved in February 2024. The National Green Hydrogen Mission had an outlay of INR 600 crore for FY 2024-25. Overall the Mission has been allocated budget of INR 19,744 crore upto 2029-30
The sector expects further hike for the Centrally-sponsored programs.
Among the flagship projects under the National Green Hydrogen Mission is NTPC’s green hydrogen facility at Pudimadaka, near Visakhapatnam in Andhra Pradesh, which Prime Minister Narendra Modi laid the foundation. This project exemplifies India’s commitment to leveraging renewable energy for sustainable development.
Green hydrogen, produced through renewable energy-powered electrolysis, is a cornerstone of India’s decarbonization strategy. The government aims to boost green hydrogen production to 5 million tons annually by 2030. This target underlines the transition of energy-intensive industries—such as steel and refineries—toward low-carbon alternatives, positioning India as a global leader in green hydrogen production and export.
State energy behemoths like NTPC and other CPSUs, alongside private players such as Gautam Adani and Mukesh Ambani, are championing these efforts. The Pudimadaka project is expected to include 20 gigawatts of renewable energy capacity, producing 1,500 tons of green hydrogen daily and 7,500 tons of derivatives like green methanol, green urea, and sustainable aviation fuel, primarily for export markets.
To support ambitious goals, the industry stakeholders expect the Union Budget to allocate substantial resources and policy incentives. Enhanced financial support and subsidies for green hydrogen projects and other green energy projects will be crucial. This includes incentives for production, storage, and transportation infrastructure. It is widely admitted that investment in renewable energy capacity, particularly solar and wind projects, will be vital to ensure adequate power supply for hydrogen production facilities.
Introduction of tax holidays and subsidies for green energy production and export will help make Indian products competitive in global markets. Moreover, there is an urgent need to enhance funding for research and development (R &D) in green technologies and storage solutions will foster innovation and reduce production costs.The Budget is also expected to encourage public-private partnerships and international collaborations to attract foreign investment and technology.
India’s renewable energy roadmap is not just about domestic goals; it’s about establishing itself as a global leader in clean energy solutions. By aligning its financial and policy frameworks with the aspirations of the green energy, India can unlock immense economic and environmental benefits. The sector also expects that the government would boost consumption by implementing and strictly monitoring the Renewable Purchase Obligations (RPO).
As the Union Budget 2025 approaches, the sector would keep its finger crossed for a well-structured budget that could mark a turning point in India’s journey to becoming a sustainable energy superpower.