Government Support for Green Hydrogen

Government Support for Green Hydrogen

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The Union government intends to provide incentives totaling Rs. 13,050 crore out of the support for the National Green Hydrogen Mission that totals Rs. 19,744 crore. Under the February-announced mission, it intends to offer incentives totaling Rs. 17,490 crore for the production of environmentally friendly hydrogen and electrolyzers. The production of electrolyzers would receive Rs. 4,440 crore out of this. The government intends to provide an incentive of up to Rs.50 per kilogram for green hydrogen in the first year, which will be reduced to Rs.30 per kilogram in the third year.

What is Green Hydrogen It is made by electrolyzing water and using electricity that comes from renewable energy. The carbon intensity ultimately depends on the carbon neutrality of the electricity source (i.e., the "greener" the hydrogen produced, the more renewable energy is included in the electricity fuel mix).

The centre intends extending direct motivations as far as rupees per kilogram. The recipients will be picked through tenders. The incentive would be the highest in the first year and would gradually be lowered in the following two years. Candidates must have developed at least 500 MW of renewable energy capacity in the past four years, 100,000 tons of hydrogen, or 500,000 tons of ammonia or methanol, respectively. In FY26, the scheme will begin. The second person stated that approximately 400,000 tons of capacity would be offered in the first and third quarters of FY24, respectively, and another 400,000 tons would be offered in the first quarter of the following fiscal year (FY25). Separate technology-specific bids may also be called in an effort to promote various routes to the green production of hydrogen.

The Centre intends to allocate Rs. 4,440 crore over five years for the production of Electrolyzers. The incentive is likely to begin at Rs. 4,440 per kilowatt (kW) in the first year and decrease annually. Candidates ought to have experience creating somewhere around 100MW of Electrolyzers over the past two years or ought to exhibit innovation associations with a substance which has delivered no less than 100 MW of Electrolyzers during a similar period. In the second and fourth quarters of FY24, bids for 1500 MW per year may be awarded.

In January, the Union cabinet approved the National Green Hydrogen Mission with an initial expenditure of Rs. 19,744 crore. This amount includes Rs. 17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, which supports domestic manufacturing, Rs. 1,466 crore for pilot projects, Rs. 400 crore for research and development, and Rs. 388 crore for other mission components. The Union Government maintains the aspiration to entrench the nation as an international production centre, utilization, and green hydrogen and derivatives export centre. By 2030, it expects to be able to produce 5 million mt (mt) of green hydrogen annually, with the potential to produce 10 million mt annually as export markets expand. In the production of ammonia and the refinement of petroleum, green hydrogen is likely to take the place of hydrogen derived from fossil fuels. In addition, it would be utilized in steel production, the utilization of hydrogen-derived synthetic fuels, such as ammonia and methanol, and city gas distribution systems.