CHENNAI: Union finance minister Nirmala Sitharaman’s interim budget for the 2024–25 financial year focused on green energy projects. Announcements in the sector include coal gasification, electrification, and offshore wind projects.
The finance minister announced setting up viability gap funding (VGF) to tap the offshore wind energy potential for an initial capacity of one gigawatt (GW). Offshore wind energy projects hold huge potential but remain unfeasible due to heavy capital expenditure requirements.
According to the Energy Information Administration (EIA), offshore wind is 2.6 times more expensive than onshore projects. Experts suggest government subsidies to make the economy work.
Welcoming the move, Arindam Ghosh, Partner at Power Advisory, Nangia Andersen LLP, said the VGF for offshore projects said, “However, there is a need to streamline key agreements and processes such as sea bed leasing arrangements and methodology for selection of off-shore locations on a techno-economic feasibility evaluation.”
With a coal gasification and liquefaction capacity of 100 metric tonnes (MT) by 2030, financial assistance for the procurement of biomass aggregation machinery to support collection was announced. This will also help in reducing imports of natural gas, methanol, and ammonia.
She said the phased mandatory blending of compressed biogas (CBG) with compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes will be mandated.