Government puts 10 states on the list for green hydrogen production

In order to launch its National Green Hydrogen Mission, the government has identified 10 potential states that could serve as important facilitators for India’s production of green hydrogen. These include West Bengal, Tamil Nadu, Andhra Pradesh, Kerala, Madhya Pradesh, Gujarat, Rajasthan, Odisha, and Karnataka.

According to two sources familiar with the matter, this will aid India’s National Green Hydrogen Mission in getting off the ground. Potentially, the states of Karnataka, Odisha, Gujarat, Rajasthan, Maharashtra, Tamil Nadu, Andhra Pradesh, Kerala, Madhya Pradesh, and West Bengal could have zones or clusters for the production of green hydrogen or ammonia.

These states have been chosen based on their proximity to existing steel and fertilizer industries, refineries, and ports, as well as their operational and potential capacity for renewable energy generation. As another industry that can offtake green hydrogen, we have also integrated the municipal gas distribution network in some areas, according to a senior official in the ministry of new and renewable energy (MNRE).

On November 2, during the first day of the three-day Invest Karnataka 2022 – Global Investors Meet, the Karnataka government signed a set of agreements totaling Rs 5.20 lakh crore. The Karnataka government intends to create India’s first green hydrogen manufacturing cluster or zone through the use of Rs 5.20 lakh crore, of which Rs 2.9 lakh crore will be invested in the green hydrogen and derivatives industry alone.

The nation’s top producer of steel, Odisha, has also made the decision to promote the production of green hydrogen and green ammonia. Steel production can be done more sustainably by employing green hydrogen, which is produced by splitting water using solar and wind energy. Additionally, this can lessen the industry’s reliance on imported coking coal. The state is presenting itself to investors as a center for the export of green hydrogen in addition to having several significant ports and creating new ones.

In Banaskantha and Kutch, Gujarat has set aside 6,000 square kilometers of land parcels exclusively for hydrogen projects. A green hydrogen and ammonia project, costing Rs 52,474 crore to build, has received Tamil Nadu approval. A 1.5 GW electrolyzer, a 5 GW solar power plant, and 1.1 million tonnes of ammonia production capacity are all included in the proposed project.

The whole national green hydrogen mission’s final draft, which Prime Minister Narendra Modi first mentioned in his Independence Day speech in August 2021, is currently going through a sequence of approvals and should be made public by December. The proposed mission offers a framework for generating demand as well as a variety of strategies to help local producers and consumers of green hydrogen.

In addition to developing infrastructure, it also entails research and development activities, pilot projects, enabling policies, and rules.

From the 20,000 crore rupee green hydrogen mission, the government is anticipated to allocate Rs 10,000-12,000 crore in production-linked incentive (PLI) schemes for electrolyzers and green hydrogen. The PLI for producing green hydrogen, however, is probably a constrained offer.

At a gathering on October 17, Union Power Minister RK Singh made a similar implication. “Only the early capabilities, perhaps 4-5 million tonnes, will require the PLI for producing green hydrogen. The green hydrogen (business) will thereafter be able to stand on its own, according to him.

The minister also discussed the ability to produce green hydrogen, noting that the industry has expressed interest in producing 25 million tonnes of green hydrogen, a figure that is likely to rise to 35–40 million tonnes. By 2030, India wants to produce 5 million tonnes of renewable hydrogen annually.

The government announced its green hydrogen policy in February, promising to provide more affordable renewable energy, interstate power transmission fee waivers for 25 years for projects completed before June 2025, land in renewable energy parks, and the establishment of manufacturing zones for the same.