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Renewable Energy industry expecting long-term fiscal support, clarity on duty structure in this year’s Budget

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The renewable energy industry has a string of expectations from the government in this year’s Budget ranging from long-term financial support announcements to better clarity on tariff and non-tariff concessions. According to industry executives, the government should also provide an increased allocation to the ministry of new and renewable energy for exploring areas such as offshore, hydrogen and storage.

“The government should offer clarity on the duty structure for solar manufacturing to kick-start the virtuous cycle of development, upstream and downstream… and also support storage as a short-term measure through concessional duty structure till local manufacturing gathers pace,” Sumant Sinha, chairman and managing director, ReNew Power, told.

In order to make it a robust sector, the government had recently introduced the production-linked incentives (PLI) scheme along with the Rs 90,000-crore liquidity infusion scheme for stressed discoms and notifying power as a service.

“While the AtmanirbharBharat package of Rs 90,000 crore was much needed in the short term but for Budget 2021, industry is looking forward to long-term financial support announcements leading to repayment of accumulated dues by discoms,” Rahul Munjal, chairman and managing director, Hero Future Energies told ETEnergyWorld recently.

There is also a policy thrust under Atmanirbhar Bharat to encourage domestic manufacturing of solar cells and modules. However, clarity with respect to tariff measures such as basic customs duty and non-tariff concessions such as the PLI scheme are still awaited.

According to Girishkumar Kadam, vice-president, sector head – corporate ratings, ICRA, the coming Budget is expected to focus on measures for renewables, strengthening of transmission and distribution (T&D) network, and on improving the viability of the distribution segment.

“Policy measures are expected to ensure availability of long tenure financing avenues for renewable energy projects. Higher Budgetary allocation is likely to be towards strengthening of T&D infrastructure so as to enable the discoms to improve their operational efficiencies,” said Kadam.

He added that policy measures were also required to revive stranded gas-based projects as they could be used to meet peak power demand and as a balancing power source in light of the rising share of intermittent renewable generation expected in the overall energy mix.

Source: ET

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