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Government can tap into green bonds to fund battery storage, Northeast hydel projects

NEW DELHI : India’s first green government bond could be used to fund a range of clean energy programs, including financing viability gaps for battery storage, energy efficiency programs for small and medium-sized businesses and capital support for hydropower projects in the Northeast.

Two government officials who are aware of the plans said the Department of Energy wants to propose these schemes to qualify for allocation in the 16,000 crore green bond. The schemes will be selected based on their potential to reduce carbon emissions and the carbon intensity of the economy.

The government announced in the Union budget of February its plan to sell government bonds to finance green infrastructure. The government loan for the second half, estimated at 5.92 trillion, including the 16,000 crore from its offering of sovereign green bonds.

Such initiatives are expected to bolster India’s green energy credentials at the UN Climate Change Conference to be held next month in Egypt’s Sharm El Sheikh.

“In the first tranche, a total of 16,000 crore under green finance bonds will be made available to all ministries. The proposal to include in the first tranche a VGF scheme for battery storage, MSME’s energy efficiency programs and equity support for the hydropower projects of the northeastern states is in the works,” said one of the two government officials mentioned above, requesting anonymity. .

VGF can drive India’s infrastructure creation plans through public-private partnerships, with electricity storage expected to be an essential part of the energy transition. Large battery repositories that store electricity in the form of chemical or electrochemical energy and convert it back into electricity can power India’s electricity grids, given the intermittent nature of electricity from clean energy sources such as solar and wind.

The idea is to store cheap green energy in battery storage during off-peak hours and release it for consumption when electricity demand increases.

Given the large share of small and medium-sized companies in the economy, the Center also aims to improve energy intensity in industries and promote the use of clean technology therein. Programs to provide appropriate price signals for achieving a demand-side response include “run, reach and trade,” a market-based energy efficiency trading mechanism.

India is working on a state energy efficiency action plan, the final action plan to be published in December.

The government is also seeking to harness India’s hydropower potential to enable the world’s largest energy transition as they provide the ideal solution for peak loads. While the total hydropower generation potential of the northeastern states of India and Bhutan is about 58 GW, most states are unable to exploit the potential due to their financial inability to use their share of equity to build these large capital intensive projects. In such a situation, the Equity Support Scheme for Hydropower Projects in the Northeastern States can assist in setting up these projects.

Questions emailed to spokespersons for the ministries of energy, new and renewable energy, finance and the Reserve Bank of India on Thursday evening went unanswered at the time of going to press.

Energy storage is expected to play a key role in helping India meet its commitment to be carbon neutral by 2070, increase its non-fossil energy capacity to 500 GW by 2030 and reduce the carbon intensity of its economy by 45% compared to the 2005 level.

According to India’s central energy sector planning body, Central Electricity Authority, the country’s electricity needs will be 817 GW by 2030, more than half of which would be clean energy. According to CEA, the country will also need 27 GW of battery storage by 2030, with four hours of storage and 10 GW of hydro-pumped storage plants (PSP).

To help India’s national network management functions, the government plans to launch bids to set up approximately 4 gigawatt hours (GWh) grid-scale battery storage systems at the regional load dispatch centers (RLDCs). India also plans to establish a grid-scale 14 GWh battery storage system at the world’s largest renewable energy park at Khavda in Gujarat and to invite bids for the largest global tender to set up a 13 GWh battery storage system at Khavda. net bowl in Ladakh.

India plans to use carbon financing to achieve energy efficiency. As part of the plan, Lok Sabha passed amendments to the Energy Conservation Act in August to make provisions to mandate the use of clean energy.

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