Budget 2024 expectations
: Ahead of Budget 2024, there is buzz of substantial support being extended by the
Modi government
to fund the north-eastern governments’ investment in
hydropower infrastructure
. This comes at a time when development of clean energy infrastructure and reduction in
carbon emissions
are one of the topmost priorities of the government.
According to an ET report, the plan, aimed at providing financial assistance to the states, will be executed through assistance to state governments in purchasing equity in such projects. The Centre could fund 24% of the equity investment, subject to a cap of Rs 750 crore per project, under “A new scheme,” according to a source, which, “focused on the northeast, is under consideration.”
The government anticipates the hydropower sector to play a major role in achieving its targets of reducing emissions intensity of GDP by 45% from 2005 levels by 2030 and attaining 50% of installed power capacity from non-fossil fuel sources.
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Hydropower is set to play a crucial role in meeting these goals. Such projects of 15 GW are under construction in the country at the moment, and capacity is likely to increase to 67 GW by 2031-32 from 42 GW. This expansion is vital for integrating renewable energy into the grid, providing the necessary balancing power to maintain stability.
The intermittent nature of renewable energy sources necessitates robust energy storage solutions. Conventional hydropower and pumped storage schemes are identified as the best technologies for integrating renewables into the grid, according to a report by the parliamentary standing committee on energy.
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Among the states, Arunachal Pradesh holds the highest identified potential for hydropower development.
The Centre is already supporting states through power reforms, offering additional borrowing limits and capital expenditure (capex) assistance. This new hydropower funding initiative is set to further empower north-eastern states in their journey towards a greener, more sustainable energy future with a focus on long-term capacity building.
