India’s Green Hydrogen Policy: a catalyst for India’s transition to Clean Energy: Rohit Ahuja, Business Development, Lead (Indian Subcontinent), SOLARPACK
Rohit Ahuja, Business Development, Lead (Indian Subcontinent), SOLARPACK
The installed capacity of Renewable Energy (RE) plants in India has rapidly grown to 150 GW plus level, which constitutes nearly 40% of the total capacity. At the COP-26 summit held in Glasgow in November 2021, India has promised that by 2030, it will meet 50% of its energy requirement from non-fossil plants and pledged to to cut its emissions to net zero by 2070.
To achieve these stiff targets, it is imperative that in addition to reducing emissions from electricity generating plants, CO2 emission from transportation sector and process industry are also minimized.
Green hydrogen, produced by electrolysis of water using RE, has a potential to be a game changer for carbon free propelling of Fuel Cell Electric Vehicles (FCEVs) and in many other applications. The gradual replacement of imported hydrocarbons with ingeniously produced green hydrogen has an added advantage of significantly reducing foreign currency outflow from India. The first phase of ‘Green Hydrogen Policy’ notified by the Government in February 2022 is likely to propel India’s transition to clean energy. The policy offers a range of incentives to encourage investment in the production of green hydrogen and green ammonia.
These interalia include waiver of inter-state transmission charges for a period of 25 years for the projects commissioned before 30th June 2025, multiple options for procuring/sourcing renewable energy, grant of Open Access within 15 days of receipt of application, option of banking of Renewable Energy for a period of 30 days, grant of ISTS Connectivity on priority basis both at the generation and the manufacturing end, establishment of a single portal for all statutory clearances and permissions.
Currently production cost of green hydrogen is significantly higher than that of gray hydrogen produced from natural gas by steam reforming process. However, due to reducing costs of RE and increasing price of natural gas, the gap is expected to narrow down by 2030. It is also essential to ensure round-the-clock and reliable renewable energy supply to green hydrogen production plants. The solar a wind based RE plants are intermittent and variable source of electricity. The generation from these plants is maximum during the low demand period and minimum during peak demand period. With increasing share of RE, there are increased chances of demand and supply mismatch, which may lead to wider fluctuations in grid frequency and voltage. To address the issue, Ministry of Power has recently notified detailed guidelines for “Procurement and utilization of Battery Energy Storage systems as part of generation, transmission and distribution assets, along with Ancillary Services”.
The first phase Green Hydrogen policy will encourage key users of hydrogen and ammonia such as the oil refining industry, fertilizer and steel plants to produce green hydrogen for their captive use. In second phase of the Policy, the Government may provide more incentives for production of FCEVs and availability of green hydrogen as a fuel at filling stations across the country.
