In his Independence Day address last year, Prime Minister Narendra Modi made a strong case for renewable energy and introduced the National Hydrogen Mission.
The mission’s goal is to assist the government in achieving its goal of creating 5 million tonnes of “green hydrogen” by 2030, as well as the development of renewable energy capacity that goes along with it. This resulted in frantic efforts to meet the goal. On February 17, 2022, the Union power ministry announced the green hydrogen and ammonia policy.
Future fuels and ideal chemicals to replace fossil fuels include hydrogen and ammonia. Because the manufacture of these fuels consumes a lot of energy, harnessing renewable energy to create green hydrogen and green ammonia is one of the most important criteria for the country’s long-term energy security. As a result, the government is pursuing a variety of steps to make the transition from fossil fuels to green hydrogen/green ammonia easier.
What exactly does the policy state?
The government’s announcement of a green hydrogen and ammonia strategy has a lot to do with encouraging renewable energy in the country. Green hydrogen/ammonia manufacturers may buy renewable energy from the power exchange or build renewable energy capacity directly or through any other developer, wherever, according to the policy.
In addition, the regulation allows anybody to obtain power within 15 days of submitting an application. The manufacturer can bank his renewable energy with distribution providers for 30 days and then return it when needed. “The policy encourages the creation of renewable energy (RE), as RE will be the primary element in the production of green hydrogen. This, in turn, will contribute in reaching international clean energy commitments, according to the power ministry.
Distribution licensees can acquire and deliver renewable energy to green hydrogen / green ammonia producers in their states at reduced rates, which will only cover the cost of procurement, wheeling fees, and a tiny margin set by the state commission.
The government also said in its policy that makers of green hydrogen/ammonia and renewable energy plants would be granted priority access to the grid to minimize any delays in the process. Manufacturers of green hydrogen and green ammonia will be exempt from interstate transmission taxes for 25 years if their facilities are completed by June 30, 2025.
The benefit of the Renewable Purchase Obligation (RPO) will be offered as an incentive to hydrogen/ammonia manufacturers and distribution licensees who use renewable energy. The government has created a single platform where all actions may be completed. Connectivity to the ISTS for renewable energy capacity put up for the purpose of producing green hydrogen / green ammonia should be given on a priority basis, both at the generating end and at the green hydrogen / green ammonia manufacturing end.
Last but not least, green hydrogen / green ammonia makers will be permitted to construct bunkers near ports for the storage of green ammonia for export/use by ships. The local port authorities will give land for storage for this purpose for a price.
Experts’ perspectives
The National Hydrogen Mission, according to energy experts, is a strong commitment from the Indian government to a cleaner future for future generations. They are optimistic that India will meet its renewable energy target of 500 GW by 2030.
“A specific policy push through it will make hydrogen competitive and scalable by lowering generating costs to sustainable levels.” As fuel cell technology matures, this will make it appealing for use not just in commercial and industrial areas, but also in the critical transportation sector across the country in the coming years, particularly for trucks, which account for more than 40% of total transportation fuels consumed today,” said Gaurav Moda, India Energy Leader, EY.
The regulation, according to Hemant Mallaya, Senior Program Lead at the Council on Energy, Environment, and Water (CEEW), would help all states whose renewable energy must be imported from other jurisdictions.
“According to CEEW study, the cost of green hydrogen generation in a state like Uttar Pradesh (UP) might reduce by 17% owing to the elimination of central transmission costs when electricity is brought in from outside the state.” This approach would assist all states that rely on renewable energy imported from other states,” Mallya added.
The policy, according to Manoj K Upadhyay, Founder and Chairman of ACME Group, is the first tangible move toward building a favorable regulatory and enabling environment for India’s green hydrogen and ammonia sector. He feels that the government has attempted to meet some of the industry’s core objectives, including as open access, grid financing, and speedier approvals for green hydrogen and ammonia projects, with this strategy. “We particularly like the clauses that allow bunkers to be built near ports for the export of green ammonia,” Upadhyay added.
Despite the initial excitement, other experts are skeptical.
“The policy on waiver of inter-state transmission rates was simply an enabling policy,” explains CEEW’s Hemant Mallya. “The primary Hydrogen Mission Policy is scheduled to be announced in the coming weeks.” India has indicated publicly that the mission paper would include two crucial elements: a production linked incentive (PLI) scheme for electrolyzer manufacture and blending rules for green hydrogen, both of which, according to Mallya, are lacking from existing policy.
In a nutshell, policy
Manufacturers of green hydrogen and ammonia will be able to buy renewable energy from the power exchange or build renewable energy capacity themselves or via any other developer.
The regulation allows anyone to buy power within 15 days of submitting an application. Renewable energy may be banked with distribution firms for 30 days and then returned when needed. At reduced pricing, distribution licensees can acquire and deliver renewable energy to green hydrogen/green ammonia producers in their states.
Renewable energy facilities will be connected to the grid on a first-come, first-served basis to minimize any unnecessary delays.
