Page 163 - Hitachi IR 2025

bonds, as well as conferring infrastructure status
to energy storage systems, including grid-scale
battery systems.
• The Green Energy Corridor projects have been
initiated to facilitate renewable power evacuation
and reshaping the grid for future requirements.
Source: https://www.ibef.org/industry/power-sector-
india
Revision of SHAKTI policy
The Government of India is reviewing the coal
allocation policy to encourage private sector
participation. The revised policy proposes two
simplified windows. Window-I permits allocation
of coal at “Notified Price” to Central Generating
Companies and State Governments. Window-II allows
allocation to all generating companies (Central, State,
or Private) at a premium over the “Notified Price”,
irrespective of ownership or nature of PPAs. The
new policy aims to support the development of an
additional 80 GW of thermal capacity.
Union budget 2025-26: Initiatives for the power
sector
The government is working towards incentivizing
electricity distribution reforms and enhancing intra-
state transmission capacity by states, which will lead
to an improvement in the financial health and capacity
of electricity companies.
Below are some other key initiatives proposed by the
government towards India’s power sector:
• The government proposed setting up a Nuclear
Energy Mission for Viksit Bharat, aimed towards
research and development of small modular
reactors (SMR) with a ` 20,000 Crores outlay,
positioning nuclear energy as a key pillar in
India’s energy mix.
• The basic customs duty on solar cells has been
revised from 25% to 20%, and that of solar
modules from 40% to 20%. It has imposed
an agriculture and infrastructure cess on
solar cells and solar modules at 7.50% and
20%, respectively.
• The government has allocated ` 20,000 Crores
towards Pradhan Mantri Surya Ghar Muft Bijli
Yojana to boost India’s solar rooftop sector,
solarise one Crore households by providing free
electricity up to 300 units per month.
• The government allocated ` 2,600 Crores
towards the Pradhan Mantri Kisan Urja Suraksha
evam Utthaan Mahabhiyan Scheme to push
demand for solar components and solarized
pumps and to ensure energy security for farmers.
• The government announced support for clean
technology manufacturing with an aim to enhance
domestic value addition and strengthen the
ecosystem for producing solar photovoltaic cells,
electric vehicle batteries, motors, electrolyzers,
wind turbines, high voltage transmission
equipment and grid scale batteries.
• The government allocated a sum of ` 600 Crores
towards the National Green Hydrogen Mission
to drive self-sufficiency through clean energy.
With this, it aims to serve as a model for global
transition towards sustainable energy solutions.
• A sum of ` 600 Crores has been allocated towards
the Green Energy Corridor for the expansion of
inter-state transmission infrastructure.
• A total of ` 16,021 Crores has been allocated
towards the Revamped Distribution Sector
Scheme to improve the quality of power supply by
eliminating the gap between the average cost of
supply and average revenue realized.
Outlook
Outlook for India’s power sector
India’s growing demand for electricity, coupled with its
focus on clean energy, presents a bright outlook for
the sector. As power consumption continues to rise,
especially with India’s per capita electricity usage still
well below the global average, the sector is set for
sustained growth and robust returns for investors over
the next decade.
India’s electricity sector is witnessing a major
transformation in the current decade of
CY 2020-29 with respect to demand growth,
energy mix and market operations. India wants to
ensure that everyone has reliable access to sufficient
electricity at all times, while also accelerating the
clean energy transition by lowering its reliance
on dirty fossil fuels and moving towards more
environmentally friendly, renewable sources of
energy. Future investments will benefit from strong
demand fundamentals, policy support and increasing
government focus on infrastructure.
The Government of India is preparing a 'rent
a roof' policy for supporting its target of generating 40
GW of installed capacity through solar rooftop projects
by 2026, and further to generate 100 GW by 2030.
It also plans to set up 21 new nuclear power reactors
with a total installed capacity of 15,700 MW by 2031.
The Central Electricity Authority (CEA) estimates India’s
power requirement to grow to reach 817 GW by 2030.
Also, by CY 2029-30, CEA estimates that the share
of renewable energy generation would increase from
18% to 44%, while that of thermal energy is expected
to reduce from 78% to 52%.
Source: https://www.ibef.org/industry/power-sector-
india
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