The Government of Andhra Pradesh has introduced the Green Hydrogen and Green Ammonia Policy-2023, aiming to achieve a production capacity of 0.5 million tons per annum (MTPA) of green hydrogen and 2 MTPA of green ammonia within the next five years.
This policy not only promotes the development of green hydrogen and green ammonia projects but also encourages the establishment of manufacturing facilities for related equipment. With a focus on renewable energy sources and biomass, Andhra Pradesh aims to create a sustainable and job-rich green economy. In this article, we will explore the goals, technology, potential impact, and challenges associated with Andhra Pradesh’s Green Hydrogen and Green Ammonia Policy.
The policy’s primary objective is to incentivize the production of green hydrogen and green ammonia through the electrolysis of water using renewable energy sources or biomass. Developers engaging in this process will fall under the purview of the policy and be eligible for the associated benefits. The New and Renewable Energy Development Corporation of Andhra Pradesh (NREDCAP) will act as the nodal agency responsible for overseeing the implementation of the policy.
Targets and Technology
Andhra Pradesh aims to achieve a production capacity of 0.5 MTPA of green hydrogen and 2 MTPA of green ammonia within the next five years. The production methods include:
- Open access from co-located or non-co-located renewable energy projects.
- Captive route from co-located or non-co-located renewable energy projects.
- Third-party sale or power exchange.
- Procurement from state distribution companies (DISCOMs) with applicable green power charges.
- A combination of the above, as long as the power source is certified by the state load despatch center.
- Incentives to Drive Adoption
To attract developers and foster the growth of green hydrogen and green ammonia projects, the policy offers a range of incentives. These include:
- 100% reimbursement of net State Goods and Services Tax (SGST) on the sale of green hydrogen and green ammonia for five years from the project’s commissioning date.
- 100% waiver on electricity duty for renewable energy used in production for five years from the project’s commercial operation date.
- 25% reimbursement of intrastate transmission charges for power procured from renewable energy sources for five years, subject to a maximum limit per installed electrolyzer capacity.
- Reimbursement of cross-subsidy surcharge for energy drawn from renewable projects located within the state for green hydrogen and green ammonia production.
- Priority grid connectivity to the intrastate transmission system for renewable projects.
- Inclusion of renewable energy consumed in the production of green hydrogen and green ammonia towards the renewable purchase obligation of consuming entities.
- Allocation of government land for renewable energy projects and green hydrogen/green ammonia plants at a lease rate, or development in proposed industrial zones or parks.
- Exemption from land-use conversion charges and stamp duty payment.
- Eligibility for incentives provided by the Industries Department for green hydrogen and ammonia production units, fuel cell production units, and green hydrogen equipment manufacturing facilities.
- Access to other incentives provided by the central government without any financial commitment from the state government.
Andhra Pradesh’s Green Hydrogen and Green Ammonia Policy has the potential to drive significant economic and environmental benefits. The production targets will contribute to reducing carbon emissions and promote a cleaner and sustainable energy sector. Moreover, the creation of approximately 12,000 jobs per MTPA of green hydrogen production showcases the potential for job creation and economic growth.
Andhra Pradesh’s Green Hydrogen and Green Ammonia Policy-2023 represents a significant step towards establishing a sustainable and green economy. The policy sets ambitious targets for the production of green hydrogen and green ammonia while providing a comprehensive framework of incentives to attract developers. By leveraging renewable energy sources and biomass, Andhra Pradesh aims to create job opportunities, reduce carbon emissions, and drive the transition towards cleaner energy. While challenges exist, the policy lays the foundation for the state’s green future and sets an inspiring example for other regions to follow.
