The target of generating 30,000 MW of renewable energy by 2017 is challenging unless budgetary allocation is increased

The Union Budget 2013-14 proposes to significantly increase budgetary allocation for renewable energy in comparison to the previous year. Still, it falls much below the 12th Five-Year Plan targets for optimum budgetary allocation, utilisation and capacity addition for renewable energy sector.

The budget does not take into account the recommendations of the Estimates Committee’s 13th Report with respect to increasing the allocation for the Renewable Energy Ministry to one per cent of the total national budget allocation.

Climate Parliament, a cross-party network of MPs working to promote renewable energy, had met Prime Minister Manmohan Singh in December last year and submitted a memorandum. The Prime Minister assured the MPs to positively look into the demands of Viability Gap Funding for encouraging private sector investments in the enhancement of transmission infrastructure for renewable energy, additional Central assistance to such States that install progressively higher infrastructure for feeding renewable energy based electricity to the grids, establishing a partial risk guarantee fund for renewable energy projects, and implementation of the Estimates Committee’s 13th Report with respect to increasing the allocations for the Renewable Energy Ministry to one per cent of the total national budget allocation.

Dr. Sanjay Jaiswal, MP, Member of the Estimates Committee and the Convener of the Climate Parliament Group in India, said the achievement of 15 per cent renewable energy in the total electricity mix of the country by 2020 under the National Action Plan on Climate Change (NAPCC) and the target of achieving 30,000 MW by 2017 (more than the double of the capacity addition targeted in the last five year plan) are challenging ones. “There must be an adequate budget allocation to the Ministry of New and Renewable Energy (MNRE), as per the recommendations of the Parliamentary Estimates and Energy Committees,’’ he remarked.

Another MP, Jayant Chaudhary, also a Steering Committee Member of the Climate Parliament, said the budget shows positive signs of the government realising the growing importance of renewable energy sector in the country. However, some of the key provisions in the Budget, like the allocation of funds from the National Clean Energy Fund (NCEF) to the Indian Renewable Energy Development Agency (IREDA) to facilitate low-cost financing to renewable energy projects and allocation of Rs. 800 crore for wind energy through the reintroduction of generation-based incentive (GBI) scheme, require further thought and work by the respective Ministries. Some other key issues like the transmission and distribution infrastructure of the power sector, especially with respect to renewable energy projects, should also be focused upon.

It is noteworthy that in the 12th Five-Year Plan, the MNRE has an ambitious target of 30,000 MW till 2017. The corresponding plan outlay for the Ministry has been fixed at Rs. 19,113 crore (BE). In 2012-13, the Ministry received an allocation of Rs. 1150 crore (RE), while it will receive Rs. 1521 crore in 2013-14 (BE). Thus, in the first two years of 12th Plan, it will receive only 22 per cent of the total budgetary allocation. The Finance Ministry has to allocate a budget realistic amount in 2013-14 (BE) and for later years, if the country has to achieve the targets of renewable energy under the NAPCC.

The cross-party group of Climate Parliament MPs emphasised that it is crucial for the Ministries of Finance and New and Renewable Energy to strive for sufficient budget allocation and proper planning and implementation, in the context of Union Budget 2013-14 for a time-bound development of transmission network and grid infrastructure for renewable energy absorption and supply, in tandem with renewable energy capacity addition plans in the country.