Balancing Act: India’s Energy Mix and the Budget 2024–25

3 min readAug 6, 2024

By Dakshitha B

The Budget 2024–25 marks a pivotal moment for our nation, focusing on strategic investments and transformative policies to drive progress. This year’s Budget emphasises on inclusive growth, technological advancement, and sustainability, aligning seamlessly with the Viksit Bharat vision. Key priorities of skill development, employment, infrastructure, energy security, and innovation are poised to boost sectors like automotive manufacturing. A cornerstone of the Budget is the commitment to balancing energy availability, accessibility, and affordability. The budget highlighted a strategic approach to achieving high, resource-efficient economic growth while addressing environmental sustainability. This balanced energy policy is not just a government mandate but a necessary evolution in our energy strategy.

Energy security, one of the government’s nine priority areas, is a critical aspect of this balanced approach. The support for rooftop solar installations under the PM Surya Ghar Muft Bijli Yojna, which provides up to 300 units of free electricity per month for 10 million households, exemplifies the expanding role of solar energy. India’s solar capacity has grown from 2.82 GW in 2014 to over 85.47 GW in 2024. This initiative significantly contributes to India’s renewable energy targets and addresses residential energy access.

Alongside solar energy, the Budget introduces policies to enhance the integration of renewable sources into the energy mix. The promotion of pumped storage projects is a key development, addressing the intermittent nature of solar and wind power. By facilitating the storage of excess electricity and its release during peak demand, pumped storage projects improve the stability and reliability of the energy grid, making the integration of renewables smoother and more efficient.

Integrating renewable energy into the electricity grid enhances the environmental benefits of electric vehicle (EV) charging. EVs charged with electricity from renewable sources, such as wind or solar, exhibit a significantly lower carbon footprint compared to those powered by fossil fuel-based electricity. This transition to cleaner energy sources not only diminishes the emissions associated with EVs but also supports a more sustainable and resilient transportation infrastructure.

Nuclear energy is another area where India is poised to make significant strides. The government’s plans to partner with the private sector to develop Bharat Small Reactors and advance research on Small Modular Reactors (SMRs) are expected to drive innovation in nuclear technology. With its lower carbon footprint and minimal land use, nuclear energy is crucial in reducing our reliance on fossil fuels. Currently, India’s nuclear power capacity stands at 7.48 GW with plans to increase it to 22.48 GW by 2031 through the development of SMRs and other advanced technologies.

However, despite the focus on renewable and nuclear energy, traditional energy sources, particularly coal, continue to play a significant role as it accounts for about 55–60% of India’s total energy production. Coal continues to be the primary source of energy due to its abundant availability and established infrastructure. The development of Advanced Ultra SuperCritical (AUSC) thermal power plants is considered to be a major step forward in improving the efficiency of coal-fired power generation. AUSC technology operates at higher temperatures and pressures than conventional coal plants, resulting in greater fuel efficiency and lower greenhouse gas emissions per unit of electricity generated. The joint venture between NTPC and BHEL to establish an 800 MW AUSC plant, supported by government fiscal measures, promises enhanced efficiency. This initiative reflects a balanced approach by the government to ensure that economic growth and environmental sustainability go hand in hand, maintaining coal as a viable energy source while minimising its ecological footprint.

The Union Budget exemplifies a well-rounded approach to managing India’s energy mix. By balancing traditional energy sources with renewable and nuclear options, the plan sets a robust foundation for a resilient and sustainable energy system. This balanced strategy not only meets immediate energy needs but also positions India as a leader in the global transition towards a low-carbon economy. The government’s commitment to sustainable growth and energy security is evident, aligning with the vision of a progressive and Viksit Bharat.

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Balancing Act: India’s Energy Mix and the Budget 2024–25

Written by OMI Foundation