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					</table>With India&#8217;s aggressive clean energy push likely to sustain the momentum it has seen in recent years, all eyes are on the Union Budget 2024 to be presented by Finance Minister Nirmala Sitharaman on July 23.
Stakeholders in the solar and other clean energy sectors have a long wishlist from the Budget for the industry to help India achieve the ambitious target of 500 GW of renewable energy capacity by 2030 and net-zero emissions by 2070. The expectations range from tax rationalization and policy reforms to financial incentives to boost growth and foster innovation.
Kishor Nair, Chief Executive Officer of <a href="https://avaada.com/" target="_blank" rel="noopener">Avaada Energy</a>, said, &#8220;The upcoming Budget is pivotal in propelling the nation&#8217;s green agenda, unlocking investments, streamlining policies, and accelerating the transition towards sustainable practices.&#8221;
Nair makes a series of recommendations on policy reforms to help India enhance its global competitiveness, drive sustainable growth, and achieve its clean energy transition goals. &#8220;Aligning state policies with national interests to facilitate the export/sale of renewable energy outside host states is a must. Removing policy constraints and step-brotherly treatment by the host state such as the imposition of additional charges/cess and restrictions on land allocation and access to state transmission network is essential.&#8221;
Neerav Nanavaty, CEO at <a href="https://blupineenergy.com/" target="_blank" rel="noopener">BluPine Energy</a>, felt robust regulations for the commercial and industrial sectors would not only attract investments but also streamline operations, fostering sustainable growth.
Tax Reforms and Financial Incentives
On the tax reforms side, the industry expects rationalization of Goods and Services Tax (GST) on solar projects, reduction or elimination of Basic Customs Duty (BCD) on imported solar modules and cells, the introduction of tax rebates for residential solar adoption, and implementation of innovative financing models like green bonds.
Sharad Pungalia, MD &amp; CEO of <a href="https://amplussolar.com/" target="_blank" rel="noopener">Amplus Solar</a>, said, &#8220;We urge the government to support solar projects by alleviating the existing tax burden on project costs, especially now that the Approved List of Models and Manufacturers (ALMM) has been fully implemented. There must be a rationalization of GST across all components of the solar sector, and BCD must be eliminated on solar modules.&#8221;
Dhanpal Jhaveri, Vice Chairman of Everstone Group in India and CEO of <a href="https://everstonecapital.com/" target="_blank" rel="noopener">EverSource Capital</a> suggested that the GST ratio should be recalibrated at 90:10 instead of prevailing at 70:30 between supply and services to reflect the true nature of the business. &#8220;This will reduce tariffs and accelerate renewable project installations.&#8221;
Parag Sharma, CEO of <a href="https://www.o2power.in/" target="_blank" rel="noopener">O2 Power</a>, recommended extending the 15% corporate tax rate under section 115BAB for new manufacturing companies by another five years to March 31, 2029. This aims to attract more foreign capital under the &#8216;Make in India&#8217; initiative.
He also suggested temporarily reducing BCD on solar modules and cells to 10%/5% until March 31, 2025, for projects bid out after March 31, 2022. Proposes increasing it to 40%/25% from April 1, 2025, once domestic manufacturing capacity is adequate.
Domestic Manufacturing
To strengthen India&#8217;s solar manufacturing capabilities, stakeholders have called for expanding the Production Linked Incentive (PLI) program, increasing allocation for research and development, and fiscal support for domestic production of solar components, especially for MSMEs.
Ishver Dholakiya, Founder and MD of <a href="https://goldisolar.com/" target="_blank" rel="noopener">Goldi Solar</a>, wants the focus on attracting large-scale investments in domestic solar panel and component manufacturing facilities. &#8220;This will not only shorten supply chains and reduce dependency on imports but also create a cost-competitive advantage.&#8221;
&#8220;We also recommend allocating the unutilized PLI funds towards smaller companies that meet specified criteria to support their entry into module and component manufacturing. This strategic distribution is crucial for boosting the capabilities of MSMEs in the renewable energy sector,&#8221; he said.
Dhanpal Jhaveri hoped the Finance Minister would announce a reduction in import duty on solar cells to zero for end-users, with an obligation to use domestic cells in a certain percentage ratio in their projects for the next four quarters based on supply commitments provided by domestic cell manufacturers.
Energy Storage and Grid Infrastructure
Recognizing the critical role of energy storage in integrating renewable energy into the power mix, the industry feels that incentives for battery energy storage systems, support for pumped storage projects, and the introduction of energy storage obligations will go a long way in augmenting energy storage capacity.
Viability Gap Funding for battery energy storage systems and capital subsidies for smart grid implementations are other suggestions for the Finance Minister.
&#8220;Implementing concessional duties on battery energy storage systems is crucial to advancing our storage capabilities and ensuring a stable and reliable energy supply, &#8221; said Sharad Pungalia.
Financing and Investment
To attract investments and improve project economics, the renewable energy sector is looking for better financing options for renewable energy projects, facilitation of credit access for MSMEs, the introduction of green bonds and low-interest loans, and inclusion of the entire energy transition sector in priority sector lending by banks and other financial institutions.
Shashank Sharma, CEO of <a href="https://sunsure-energy.com/" target="_blank" rel="noopener">Sunsure Energy</a>, said, &#8220;We would like to see more incentives for businesses and corporates to decarbonize India&#8217;s industrial landscape. It is vital to prepare energy-intensive industries like cement and steel for the transition phase of the Carbon Border Adjustment Mechanism (CBAM).&#8221;
Varun Puri, Managing Director of <a href="https://greenpowerintl.com/" target="_blank" rel="noopener">Green Power International</a>, feels investments are necessary to fund R&amp;D to produce hydrogen with relatively coarse water quality, ideally close to seawater. &#8220;This will allow the most efficient use of one of the most abundant natural resources, i.e., water.&#8221;
Dhiman Roy, CEO of GreenH Electrolysis, said lowering GST on solar modules, wind turbines, and electrolyzers from the current rate of 5% could significantly help reduce project costs.  He also called for setting mandatory targets for central and state government entities to procure green hydrogen for their operations.
Skill Development 
Neerav Nanavaty and Shashank Sharma wanted the government to address the need to upgrade the skills of the workforce to support the development of the renewable energy sector.
Sharma said, &#8221; Training for new green jobs and reskilling of workers from conventional energy sectors will be essential for a smooth transition.&#8221;
As the sector awaits the Budget announcements, there is optimism that supportive policies and strategic investments will pave the way for a greener, more resilient energy future for India.

Solar Industry’s 2024 Budget Wishlist: Tax Cuts, GST Reforms and Fiscal Incentives

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					</table>Europe’s power industry has called for ramping up investments in aging grid infrastructure by 84% every year until 2050.
The grid infrastructure is ill-suited for accommodating decentralized renewables, electric vehicles and smart grids, Eurelectric, which represents the interests of the European electricity industry, said.
In its Power Barometer 2023 report, <a href="https://www.eurelectric.org/" target="_blank" rel="noopener">Eurelectric</a> highlighted the importance of investing in grid infrastructure upgrades to achieve renewable energy objectives.
&#8220;Although grid investments saw an 8% increase from 2021 to 2022, the report underscores the need for an 84% annual investment boost until 2050, ideally allocating €0.67 (~$0.71) to grid enhancements for every €1 (~$1.07) invested in generation capacity,” it said.
While some progress has been made in reducing carbon intensity in the power sector, the need to reduce dependence on fossil fuels and bolster renewable energy sources has become even more pressing. To achieve Europe&#8217;s renewable energy goals, the report recommended the following:
<ul>
<li>Tripling the rate of electrification by 2050 (reaching a storage capacity of 191 GW by 2030 and potentially 488 GW by 2050, an increase from the current 6 GW in 2023, alongside adding 605 GW of renewable capacity by 2030)</li>
<li>Doubling of installed renewable energy generation capacity (adding 605 GW of renewable capacity by 2030, mostly coming from wind and solar).</li>
<li>Increasing the adoption of electric vehicles (reaching a 58% growth rate within 6.5 years to meet 2030 decarbonization targets)</li>
<li>Expanding public charging infrastructure by 480,000 units to 3,500,000 by 2030</li>
<li>Expansion of energy storage capacity from 6 GW in 2023 to 191 GW by 2030 and up to 488 GW by 2050 to efficiently harness renewable energy sources</li>
<li>Investing in grid infrastructure and digitalization for transitioning to a decentralized model, and modernizing outdated infrastructure</li>
</ul>
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<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/09/Investments-in-distribution-grid.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-58866 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/09/Investments-in-distribution-grid.png" alt="Investments in distribution grid" width="602" height="391" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/09/Investments-in-distribution-grid.png 602w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/09/Investments-in-distribution-grid-300x195.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/09/Investments-in-distribution-grid-600x390.png 600w" sizes="(max-width: 602px) 100vw, 602px" /></a>
Eurelectric’s Secretary General Kristian Ruby said, “We need more lines, more digitalization and more climate resilience to get our grids fit for net-zero. This requires a change in the regulatory approach. Grid operators must be allowed to make anticipatory investments so we can start preparing for higher electrification.”
The deployment of new generation capacity varied strongly per technology. Whereas solar PV registered record deployment of 41 GW, wind installations were trailing due to a combination of supply chain issues, slow permitting and poor tender design.
Eurelectric said growing variable wind and solar generation requires an increase in firm and flexible technologies to stabilize the system. In addition to conventional plants, storage solutions should massively ramp up. Although installations have increased to 4.5 GW in 2022, around 11 to 14 GW would be needed per year to meet the future system needs.
Early this month, the European Parliament <a href="https://www.mercomindia.com/european-parliament-revises-renewable-target" target="_blank" rel="noopener">approved</a> an updated Renewable Energy Directive aiming for 42.5% renewable energy in final consumption by 2030, with encouragement for member states to reach 45%.
Europe will need to <a href="https://www.mercomindia.com/europe-32-trillion-investment-net-zero-2050" target="_blank" rel="noopener">invest</a> over $32 trillion in energy and related technologies to achieve a net-zero economy by 2050, according to BloombergNEF.

Europe’s Power Sector Calls for Ramping Up Aging Grid Infrastructure

India’s clean energy footprint is increasing every year and more than 64 GW of renewable energy capacity have been connected to the grid so far, according to Minister of Power R.K. Singh.
This is a significant development for the country as India’s national grid is not modern and the industry has grave misgivings about the continued integrity of it in the face of a rising amount of variable renewable energy generation.
In a written statement to the Rajya Sabha, Singh said, “As on January 31, 2018, the total renewable energy capacity installed in the country is about 65.9 GW, out of which 64.3 GW of renewable energy power projects are connected to the National Electricity Grid, and the remaining 1.6 GW are off-grid/captive power projects.”
Singh wrote about the effects of renewable energy on the grid and about the government’s road map for enhancing the national grid’s renewable-based capacity.
According to Singh, “Renewable energy sources (wind and solar) are characterized by variability and uncertainty. To address these aspects, a comprehensive plan comprising transmission as well as control infrastructure was identified as a part of <a href="https://mercomindia.com/can-green-energy-transmission-corridor-development-keep-rapid-renewable-energy-growth-india/" target="_blank" rel="noopener">Green Energy Corridors</a>, which includes intra-state and inter-state transmission system strengthening and control infrastructure, establishment of renewable energy management centers (REMC) at state/regional/national load dispatch center levels.”
“The intra-state transmission (system) is being implemented by respective state transmission utilities (STUs) and inter-state transmission is being implemented by the <a href="http://www.powergridindia.com/" target="_blank" rel="noopener">Power Grid Corporation of India Limited</a> (PGCIL), which are under various stages of implementation. REMCs are also under implementation by PGCIL,” added Singh.
“In order to integrate the envisaged 20 GW capacity of solar power parks, a comprehensive transmission plan including intra-state and inter-state systems is also evolved as a part of &#8220;Green Energy Corridors-II.&#8221; The transmission program for two solar parks is already commissioned and balance is under various stages of implementation,” informed the minister.
In light of the constantly increasing renewable energy capacity, various states like <a href="https://mercomindia.com/haryana-draft-regulations-deviation-charges/" target="_blank" rel="noopener">Haryana</a>, <a href="https://mercomindia.com/solar-wind-generators-pay-deviation-charges-production-andhra-pradesh/" target="_blank" rel="noopener">Andhra Pradesh</a>, <a href="https://mercomindia.com/gerc-issues-draft-regulations-focus-large-scale-grid-integration-solar-wind-2017/" target="_blank" rel="noopener">Gujarat</a>, <a href="https://mercomindia.com/maharashtra-deviation-charges-solar-wind/" target="_blank" rel="noopener">Maharashtra</a>, and <a href="https://mercomindia.com/tamil-nadu-developers-solar-wind/" target="_blank" rel="noopener">Tamil Nadu</a> have proposed deviation charges for renewable energy generation.
Singh’s comments come as a sudden surge in the country’s planned renewable capacity has left many in the industry to wonder if India’s <a href="https://mercomindia.com/grid-infrastructure-india-solar-wind-tenders/" target="_blank" rel="noopener">transmission infrastructure</a> is well-equipped to handle the influx of renewable power generation.
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Need for Green Energy Corridors Grows as Over 64 GW of Renewables are Connected to the Grid

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