It’s plug-and-play time on a green turf for the power sector. Five showcase projects, higher pollution tax on coal and a big push to renewable energy sources mark the government’s formula for powering economic growth.
The formula fits with the government’s promise to guarantee 24x7 power supply in the next few years. The five new ultra-mega power projects — with all clearances and fuel allocations ready before being bid out — create a captive market for a billion-tonne coal production in the next few years.
And the target of 1,75,000MW renewable energy capacity by 2022 would help India shine at the Paris climate talks, scheduled for December, on the roadmap to cut its carbon footprint. (Find all budget-related stories here.)
The proposed doubling of green cess on coal from Rs 100 per tonne to Rs 200 for funding investment in renewable sources and clean coal technology for power plants bolsters India’s claim that it is serious about reducing greenhouse gas emissions, but at its own pace. However, some unanswered questions remain.
KPMG’s Manish Agarwal doubts whether the power sector has the financial capacity to invest in the five new showcase projects totalling 20,000MW. This doubt is natural, given that the financial sector is stressed over 16,000MW gasfired generation capacity idling for want of fuel.
The mode of drawdown of coal cess so far accumulated and expected to be mopped up has not been described. READ ALSO:Union Budget 2015: Highlights
Solar power is to have the lion’s share of the renewable energy target at 1,00,000MW, followed by 60,000MW of wind energy, 10,000MW biomass and 5,000MW of small hydro projects of up to 25MW each. Solar power generation capacity right now stands at 3,000MW, accounting for 6.5 per cent of the electricity mix.
Power minister Piyush Goyal has said that India’s renewable energy sector plans to attract $200 billion in investments as many domestic and international firms have shown interest in tapping the potential of green power.
