India Slashes Green Hydrogen Costs with New Incentives & Policy Push

The National Green Hydrogen Mission (NGHM) forms the cornerstone of these efforts, aiming to make India a leading player in the green hydrogen ecosystem. Under the mission, the country targets a green hydrogen production capacity of 5 million metric tonnes per annum by 2030, supported by an associated addition of about 125 GW in renewable energy capacity. To achieve cost reductions, the government has introduced production incentives and other supportive policies.

Under the incentive scheme for electrolyser manufacturing, 15 companies have been awarded a total manufacturing capacity of 3,000 MW per annum. The total incentive awarded stands at Rs 4,440 crore. Electrolysers are critical components in green hydrogen production, as they facilitate the electrolysis process powered by renewable energy.

Additionally, under the incentive scheme for green hydrogen production, 18 companies have been allocated a cumulative production capacity of 8,62,000 tonnes per annum. For the procurement of green hydrogen specifically for refineries, two companies have been awarded a total capacity of 20,000 tonnes per annum.

The minister highlighted that prices have been discovered by the Solar Energy Corporation of India for the production and supply of 7,24,000 tonnes per annum of green ammonia, a key derivative of green hydrogen, to 13 fertiliser units across the country. This step underscores efforts to create stable demand and integrate green hydrogen into industrial applications.

Other measures to facilitate cost reduction include exemptions from Inter-State Transmission System (ISTS) charges for green hydrogen and green ammonia plants commissioned on or before December 31, 2030, which utilise renewable energy. These exemptions apply for 25 years from the date of commissioning.

Duty benefits have also been extended under Section 26 of the SEZ Act, 2005, for units installing and operating renewable energy equipment exclusively for captive consumption in green hydrogen production. The government is optimising the energy mix for green hydrogen by rapidly expanding low-cost renewable energy through competitive tariff-based bidding, large-scale solar and wind deployment, and enabling frameworks such as standard bidding guidelines for various renewable projects.

Exemptions from certain model approval requirements for renewable equipment in special economic zones or export-oriented units supplying power to green hydrogen plants have been granted, alongside 100 per cent foreign direct investment under the automatic route.

These initiatives, combined with the development of green energy corridors and transmission infrastructure, aim to ensure affordable and scalable green hydrogen production while advancing India's clean energy transition and reducing reliance on fossil fuels.

- IANS