India rolls out comprehensive green hydrogen policy

India rolls out comprehensive green hydrogen policy

by 5paisa Research Team Last Updated: Aug 08, 2022 - 07:02 pm 36.8k Views

On 17th February, the Ministry of Power has notified the first phase of the National Hydrogen Mission policy with focus on green hydrogen and green ammonia. The idea is to boost the production of hydrogen and ammonia using renewable energy. There are some key benefits like waiver of power transmission charges for 25 years, leeway to buy renewable power from exchanges and to also bank unconsumed renewable power.

Special facilities for manufacturers of Green Hydrogen / Green Ammonia

Here are some of the key benefits that the Green Hydrogen policy offers to producers.

a) Facility to source green energy from power exchanges and also from own captive sources of power.

b) Producers will get open access to transmission within a period of 15 days from the date of application.

c) Producers can bank unconsumed power with power distribution companies (DISCOMS) for a period of up to 30 days under the new policy.

d) The DISCOMS will be permitted to buy and also to sell renewable power to Green Hydrogen / Ammonia producers at concessional rates.

e) The green hydrogen manufacturing companies will get waiver of interstate transmission charges for a period of 25 years from the date of application.

f) Another privilege offered to green hydrogen producers is connectivity to the power grid on a priority basis and on favourable terms.

g) Single one-point portal for all requisite clearances and also connectivity on a special priority basis to such green hydrogen / green ammonia producers.

h) As an added incentive, the manufacturers of green hydrogen / green ammonia will be allowed to set up bunkers just next to the port for the purpose of storage.

Meeting climate targets under COPU 26

The Hydrogen Mission aims to help the government meet its climate targets and making India a green hydrogen hub. The target is to reach production of 5 million tonnes of Green hydrogen by 2030. The implementation of the Green Hydrogen project will provide clean fuel to the common people. This will reduce dependence on fossil fuel as well as reduce crude oil imports. Over time, the idea is also that India emerges as an export hub for green hydrogen and green ammonia.

There have already been big commitments on Green Hydrogen from Indian corporate sector. There are already commitments on green hydrogen coming from companies like Reliance Industries, Adani group, Larsen & Toubro and Greenko. It is not just the private sector but even PSU companies have already made serious commitments to green hydrogen and these include  the likes of IOCL, BPCL, GAIL and NTPC. 

A quick word on Green Hydrogen

Green hydrogen refers to the hydrogen generated from electrolysis of water wherein the entire process is run on renewable energy. In other words, the source of electricity to generate the hydrogen molecule gives it the colour. For example, brown hydrogen is from coal; grey hydrogen is from natural gas and blue hydrogen is from methane. On the other hand, green hydrogen is entirely from renewable sources.

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