Key Points

With final bid submissions due shortly, the tender calls for the production and supply of 724,000 tonnes of green ammonia annually across 13 fertiliser plants, under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme.

The SECI, a Navratna Central Public Sector Undertaking under the administrative control of the Ministry of New and Renewable Energy (MNRE), will anchor demand aggregation and sign long-term offtake agreements, providing producers with market certainty over a 10-year contract period. The tender was issued on June 7, and the last date for bid submission is June 26.

Ammonia, an essential component in urea and other nitrogen-based fertilisers, is currently produced using fossil fuels, leading to high greenhouse gas emissions. The SECI’s tender leverages renewable energy to produce green hydrogen and ammonia, promoting low-emission, domestic fertiliser production.

To ensure financial viability, the government is offering financial incentives under the National Green Hydrogen Mission, with Production Linked Incentives (PLI) of Rs 8.82/kg, Rs 7.06/kg, and Rs 5.30/kg for the first three years, respectively, amounting to a total support of Rs 1,533.4 crore. The government is also committed to a robust payment security mechanism to de-risk potential payment delays from fertiliser companies. This gives suppliers the assurance of steady cash flows, encouraging greater participation and financing. The bidding process will follow SECI’s e-reverse auction model, ensuring competitive and transparent price discovery.

India consumes approximately 17-19 million tonnes of ammonia annually, with more than 50 per cent of its hydrogen requirement used in fertiliser production. However, most of this is derived from imported natural gas. The SECI's initiative is expected to drastically cut this dependence, reduce exposure to global gas price fluctuations, and lower the trade deficit. Producing green hydrogen emits less than 2 kg of CO2 per kilogram, compared to up to 12 kg CO2 from conventional grey hydrogen.

Domestic green ammonia production is expected to enhance resilience during geopolitical disruptions and generate new employment opportunities.

"SECI’s green ammonia tender addresses the 'chicken-and-egg' challenge facing the hydrogen economy by simultaneously stimulating demand and supply. It creates an immediate demand pull that encourages investment in green hydrogen production, electrolyser manufacturing, and allied clean energy sectors," an official statement said.

This initiative is a pivotal move toward India’s goal of achieving net-zero carbon emissions by 2070, the statement added.

- IANS