(Bloomberg) -- India earmarked 350 billion rupees ($4.3 billion) to invest in the nation's energy security and green transition, in a step toward Prime Minister Narendra Modi's goal of reaching net zero emissions by 2070.
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The investments will be made by the oil ministry, Finance Minister Nirmala Sitharaman said in her federal budget speech Wednesday. She didn't give a time frame for the spending, but listed green growth as one of the key budget priorities for the year through March 2024.
"We are implementing many programs for green fuel, green energy, green farming, green mobility, green buildings, and green equipment and policies for efficient use of energy across various economic sectors," she said. "This budget builds on our focus on green growth."
The country is walking a tightrope on climate, with the need to secure energy supplies from domestically available resources, mainly coal, while at the same time performing its duty as a large emitter to decarbonize through its clean power push. A day before the budget, India's Economic Survey tabled in parliament defended the country's use of fossil fuels, citing energy security priorities.
The latest investment is one of a range of other government commitments to fuel the green economy. The government has already announced incentives for manufacturing key clean energy equipment, including solar modules and electrolyzers used in making green hydrogen. Capital subsidies are on the way for setting up 4 gigawatt-hours of grid-scale battery storage capacity, Sitharaman said in her speech.
The government is also working on a detailed framework for pumped storage projects, she said. Affordable energy storage, which can be coupled with intermittent renewable power for uninterrupted supplies, will be key to the country's switch from coal, Power Minister Raj Kumar Singh said in September.
Along the country's path to reach net zero, "there is a reasonable time when both the new and old energy will coexist," said Mukesh Surana, chief executive officer at Mumbai-based Ratnagiri Refinery & Petrochemicals Ltd. "We need to look at all available sources and harness all sources of energy in a country like India."
The nation also plans to invest 207 billion rupees to build a power transmission line connecting the northern hilly province of Ladakh. It is seeking to draw out 13 gigawatts of the renewable electricity from the sunny Himalayan region bordering China.
The transmission link "will help unlock renewables potential in the Ladakh region, which remains untapped so far," said Shantanu Jaiswal, BloombergNEF's head of India research.
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