Subsidies for renewable energy, electric vehicles more than doubled in FY 2022: Report


Subsidies for renewable energy, electric vehicles more than double in 2022: report

IndiaSubsidies for renewables energy and electric vehicles more than doubled in 2022, but it will be essential for the government to strengthen this momentum in the coming years to achieve the country’s climate goals, a new study by the International Institute for Sustainable Development (IISD) has said.

The study titled Mapping India’s Energy Policy 2022 (Update): Tracking Energy Support found that subsidies for renewable energy reached Rs 11,529 crore in FY 2022, up from Rs 5,774 crore in FY 2021, with the same support for electric vehicles. the period increased by 160 percent, from 906 million to 2,358 million.

This increase is the result of greater policy stability, a 155 percent jump in solar PV installation and a post-Covid economic recovery, according to the study.

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However, to confirm this trend, the government needs to further improve support measures, including subsidies, public finance and investments by publicly owned companies, to reach 500 GW of non-fossil and clean power by 2030 in the coming years. zero by 2070, experts warn.

That is, in FY 2022, India allocated four times more aid to fossil fuels than to clean energy, although the gap has narrowed significantly since FY 2021, when aid was nine times greater.

“Continued support for fossil fuels is inconsistent with India’s long-term energy access, energy security and climate change goals,” he said. Swasti Raizadaco-author of the study and Political consultant at IISD.

“Aligning government support with climate goals will require a shift in support from fossil fuels to clean energy, including the development of a clear investment plan and interim targets to achieve the long-term goal of net zero by 2070.”

Subsidies for coal, fossil gas and oil stood at €60.316 billion in FY2022, down 76 percent in real terms from FY2014, according to the study. In particular, oil and gas subsidies fell by 28 percent to 44.383 billion euros in the 2022 fiscal year, but this does not include revenue lost due to reductions in excise duty and VAT on diesel and gasoline.

Overall, India committed at least Rs 5 lakh crore to support the power sector in FY2022, including over Rs 2.2 lakh crore in subsidies.

While fossil fuels brought significant financial returns to the government, with energy accounting for nearly one-fifth (19 percent) of total revenue in FY 2022 at Rs 9 billion, IISD experts found the social costs of energy to be at least four times higher. rather than government revenue.

Fossil fuel use costs Indians between Rs 14 lakh crore and Rs 35 lakh crore in costs such as air pollution and climate change, the report reflects uncertainty about the extent and cost of impacts.

“The government has a perfect opportunity to use these massive energy inflows strategically to help people and businesses transition to clean energy. In the long run, this will not only reduce the social costs of fossil fuels, but also create a cleaner and cheaper energy system. In India,” Raizada add

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