In Short : India has launched a landmark green ammonia initiative, focusing on producing ammonia using renewable energy sources. This project aims to reduce dependency on fossil fuels, support sustainable agriculture, and advance the country’s commitment to cleaner industrial practices.
In Detail : The Government has announced plans to produce half a million tonnes of green hydrogen-based ammonia annually to promote renewable energy sources
Led by the state-owned Solar Energy Corporation of India (SECI), India plans to launch ten-year contracts for the supply of 539,000 metric tonnes of green ammonia each year. The procurement will be distributed across eleven projects with various delivery points across the country.
Released as a Request for Selection (RfS), the tender is aimed at selecting producers who can meet the supply target. The initiative falls under Mode 2A of the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, which is part of India’s National Green Hydrogen Mission.
The mission illustrates the country’s dedication to decreasing its carbon footprint and encouraging the adoption of renewable energy sources. Green ammonia, which is produced from green hydrogen utilising solar or wind power, will primarily be used for fertiliser production, aiming to make the agricultural sector more sustainable and eco-friendlier. This will help in providing the lowest possible price for users.
To ensure competitive pricing, SECI has opted for a reverse auction mechanism. In this process, sellers will compete to offer the lowest possible price, with the most cost-effective bid winning the contract. This approach not only encourages fair pricing but also drives innovation and efficiency among producers.
The auction does not set a ceiling price, allowing market forces to determine the most competitive rates. Interested companies have until July 29, 2024, to submit their bids. A pre-bid meeting is scheduled for June 28, 2024, allowing potential bidders to seek clarifications and better understand the tender requirements.
This initiative is part of the Indian Government’s broader strategy to enhance green hydrogen production and its applications. Now, the Government has allocated resources for the annual production of 412,000 metric tonnes of green hydrogen and the manufacturing capacity of 1.5 GW of electrolysers.
The global context for green hydrogen and ammonia is also evolving rapidly. For instance, Yara recently opened a 24 MW renewable hydrogen plant in Herøya, Norway. Meanwhile, TotalEnergies and Air Products have entered into a significant agreement for the annual supply of 70,000 tonnes of green hydrogen in Europe for 15 years, starting in 2030.
India’s foray into green ammonia procurement through SECI is a monumental step towards sustainable development. It aligns with global trends and showcases the country’s proactive approach to green energy transition. By promoting a competitive environment through reverse auctions, India aims to not only secure a steady supply of green ammonia but also drive down costs and promote innovation in the renewable energy sector.
This initiative also highlights India’s commitment to reducing its reliance on fossil fuels and minimising greenhouse gas emissions. The use of green ammonia in fertiliser production is particularly significant, as it can substantially lower the carbon footprint of agricultural practices. Given the critical role of agriculture in India’s economy, this move could have far-reaching positive impacts on both the environment and the rural community.
As the global demand for green hydrogen and ammonia grows, India’s strategic initiatives position it as a leading force in the domain of renewable energy. By prioritising sustainable practices and using competitive bidding processes, the country is paving the way for a cleaner, greener future.
