34 companies bid for India’s green hydrogen subsidies
29 Dec 2023
A total of 34 companies have submitted bids for projects to be developed under the Government of India’s Green Hydrogen Mission.
Of these, 14 companies, including Acme Cleantech, Avaada GreenH2, Bharat Petroleum Corp, CESC, Greenko ZeroC, JSW Energy, Reliance Industries, Sembcorp Green Hydrogen, and Torrent Power, have submitted bids for incentives for green hydrogen production.
The 20 companies that have submitted bids for the incentive scheme for the manufacture of electrolysers announced by the Solar Energy Corporation of India (SECI), include Adani Group, Acme Cleantech Solutions, Advait Infratech, Bharat Heavy Electricals, Jindal India, Larsen & Toubro, Ohmium Operations, Reliance Industries, and Waaree Energies, among others.
The 34 bids come in response to the government’s invitation for proposals to participate in its Rs17,490 crore ($2.4-billion) incentive programme for green hydrogen production and electrolyser manufacturing in the country. The programme, announced early this year, offers incentives equivalent to 10 per cent of the cost of production of green hydrogen fuel.
The government has received bids for the production of 5.5 lakh tonnes of green hydrogen against the initially anticipate 4.5 lakh tonnes. Similarly, bids for the manufacturing capacity of electrolisers totaled 3.4 gigawatts (GW) against the initial invitation for 1.5 GW.
The subsidies cover the first three years of production, equivalent to Rs50 ($0.6) per kg for the first year, Rs40 ($0.48) in the second year, and Rs30 ($0.36) a kg in the third year.
The government will allocate around Rs13,000 crore (approx $1.56 billion) to produce green hydrogen, with the remaining funds dedicated to the manufacturing of electrolysers used in the process of splitting hydrogen and energy molecules through electrical means.
The two distinct financial incentive schemes will run up to the 2029-30 financial year.
Currently, the manufacturing cost of green hydrogen in India stands at approximately Rs300 ($3.60) per kilogram.
The government intends to invite the bids in three tranches for green hydrogen supply and in two tranches for electrolysers. Each tranche will cover a capacity of 1,500 megawatts, with an incentive set at Rs4,400 (approx $52.83) per kilowatt.
The government will support 3.6 million tonnes of hydrogen production over the next three years and approximately 3,000 megawatts of annual electrolyser capacity for a span of five years under this programme.
Depending upon the markets and technology development, specific incentive schemes and programmes will continue to evolve as the mission progresses, according to the MNRE.
Government of India defines green hydrogen as hydrogen produced utilising renewable energy. This encompasses various methods such as electrolysis or the conversion of biomass. The definition extends to electricity generated from renewable sources, which can be stored in an energy storage system (ESS) or integrated into the grid in compliance with relevant regulations.
Government has also mandated that non-biogenic greenhouse gas emissions (GHG) resulting from water treatment, electrolysis, gas purification, and the processes of drying and compressing green hydrogen produced via electrolysis must not exceed an average of 2 kg of carbon dioxide equivalent per kg of hydrogen over the last 12-month period.
Standards for green hydrogen produced through the conversion of biomass specify that non-biogenic greenhouse gas emissions (GHG) originating from biomass processing, heat/steam generation, biomass-to-hydrogen conversion, gas purification, and the processes of drying and compressing hydrogen must not exceed an average of 2 kg of carbon dioxide equivalent per kg of hydrogen over the preceding 12 months.
The ministry of new and renewable energy will specify detailed methodology for measurement, reporting, monitoring, on-site verification, and certification of green hydrogen and its derivatives The Bureau of Energy Efficiency (BEE) of the ministry of power will act as the nodal authority for accreditation of agencies for the monitoring, verification, and certification for green hydrogen projects.
The National Green Hydrogen Mission aims to revolutionise India’s energy landscape. The mission focuses on various components, including the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, pilot projects, research and development (R&D), and other mission-related activities.
By 2030, the mission envisions achieving a green hydrogen production capacity of at least 5 million metric tonnes per year, accompanied by a renewable energy capacity addition of about 125 gigawatts. The mission envisages cumulative investments of over Rs8,00,000 crore, creation of more than 6,00,000 jobs, a cumulative reduction in fossil fuel imports exceeding Rs1,00,000 crore, and reduction of nearly 50 million metric tonnes of annual greenhouse gas emissions.
The mission’s benefits extend to the creation of export opportunities for green hydrogen and its derivatives, decarbonisation of industrial, mobility, and energy sectors, reduced dependence on imported fossil fuels, development of indigenous manufacturing capabilities, employment generation, and advancements in cutting-edge technologies.
Meanwhile, the government has commenced discussions with countries like France, Italy, and Germany regarding the potential export of green hydrogen. European Union nations, including the Netherlands, Austria, and Sweden are also under the government’s radar. Further, a National Green Hydrogen Mission report states that bilateral negotiations are “underway” for signing agreements with Japan, South Korea, and Singapore.
Also, the renewable energy sector allows up to 100 percent FDI under the automatic route under the government’s foreign direct investment (FDI) policy.
