India's Transition to Clean Energy

The Union Budget 2025, tabled on 1 February, continues to prioritize energy security and energy transition with significant investments and policy reforms aimed at transforming India’s energy landscape. However, challenges remain in fully achieving energy transition goals, especially in the face of global disruptions and domestic policy complexities.

Measures taken by Government for clean energy

• Budget Allocations for Renewable Energy: The Ministry of New and Renewable Energy’s budget allocation increased from Rs 1,535 crore in fiscal year 2015 to Rs 32,626 crore in 2025, highlighting India's growing commitment to clean energy.
  • However, there has been underutilization of these funds in most years, except for 2015 and 2023, leading to lower revised estimates (REs).
• PM-KUSUM Scheme: Launched in 2019 with an outlay of Rs 34,422 crore, the PM-KUSUM scheme aimed to set up off-grid solar irrigation pumps and grid-connected solar plants on fallow farmlands. Despite its ambitious goals, the scheme's response has been underwhelming, with less than half a gigawatt of installed capacity achieved so far.
• Exemptions to Customs Duty: Recognizing the inflationary impact of steep basic customs duty (BCD), the government decided to exempt 12 critical minerals and 35 capital goods from these duties. This policy shift aims to facilitate the local production of lithium-ion battery technology, crucial for India’s renewable energy future.
• Major schemes to promote clean energy and sustainable living:
  • Green Hydrogen Mission 
  • PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth
  • GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme
  • Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI)
  • Amrit Dharohar
  • Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)
  • Green Energy Corridor (GEC)
  • National Smart Grid Mission (NSGM) and Smart Meter National Programme
  • International Solar Alliance (ISA)
  • Surya Ghar Muft Bijli Yojana

Challenges in Clean Energy Adoption

• Import Dependence and Tariffs: In a bid to reduce reliance on Chinese imports, the government imposed a 40% basic customs duty (BCD) on solar modules and 25% on solar cells. While this aimed to boost domestic manufacturing, it led to rising solar power prices and slowed installation across the country.
• Coal Dominance in Power Generation: Despite significant growth in renewable energy, coal still contributes to about 70% of India's power output (as of October 2024). Experts have stressed the need for grid-scale battery storage technology to address the intermittent nature of renewable energy production and reduce reliance on fossil fuels.
• Critical Minerals Framework: India faces the challenge of securing critical minerals needed for energy transition technologies. These minerals, essential for batteries and solar cells, are largely imported, particularly from China.
• Equitable implementation of initiatives, especially in areas like rooftop solar uptake, remains uneven across states.
• Infrastructure readiness for the integration of renewables and the need for large-scale battery storage are key hurdles.

PYQ

Q. “Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)”.Comment on the progress made in India in this regard. (2018)