India announced plans to produce five million tonnes of green hydrogen by 2030 and unveiled a policy that will enable manufacturers to source renewable energy to produce hydrogen or ammonia without paying transmission charges for 25 years.
Reliance Industries, Larsen & Toubro, JSW Steel, Jindal Steel, NTPC, BPCL and Indian Oil Corp among others have announced plans to set up green hydrogen units. The renewable energy industry is expected to get a lift from the policy as its cost will fall for those producing green hydrogen or ammonia, thereby increasing demand. Industry insiders say despite the incentives green hydrogen would cost substantially more than that made from natural gas and the price would need to fall more for its greater adoption. RIL chairman Mukesh Ambani had last year announced a target to produce green hydrogen at $1 per kilogram by the turn of this decade.
The policy allows priority transmission, banking with distribution companies, quick open access, and single-window clearance for renewable energy used for green hydrogen or ammonia. Producers will be given land for storage of such green hydrogen at ports. “The policy covers several strategic enablers for growing India’s Green Hydrogen output, including waiver of inter-state transmission charges, allotment of land in RE parks and credit towards renewable RPO compliance,” said Mahesh Palashikar, president, GE South Asia. ReNew Power chief commercial officer Mayank Bansal said the policy is a good step though clarity is needed on cross-subsidy surcharge and additional cross-subsidy surcharge. ACME group chairman Manoj K Upadhyay said the policy is the first concrete step in the direction of creating a favourable regulatory environment. Most domestic oil refiners have announced big plans to produce green hydrogen and some of them have already begun the process to set up small facilities based on captive renewable power plants. Green Hydrogen and ammonia are envisaged to be the future fuels to replace fossil fuels and the production of these fuels is one of the major requirements towards sustainable energy security of the nation, an official statement said.
The cost of green hydrogen is expected to be ₹350-400/kg against an average ₹140-180/kg from natural gas reformation. “Waiver of interstate transmission charges will bring down the cost of power, a key element in the production of green hydro gen. The provision for bank The provision for banking of unconsumed renewable power would also be very helpful,” Hindustan Petroleum Corp chairman MK Surana said.