Hydrogen policy offers 25-year transmission fee waiver for green power
Announcing the first set of measures under the Green Hydrogen Policy, Minister of Energy and Renewable Energy RK Singh said the government is considering an annual production target of 5 million tons of hydrogen. here 2030.
The policy allows companies to build renewable energy capacity on their own or through a developer anywhere in the country. They can also buy green energy from exchanges. In either case, interstate transportation will be free when the electricity is used to produce green hydrogen.
The government will also allow manufacturers of green hydrogen/ammonia to bank unconsumed renewable energy, for up to 30 days, with distribution companies and take it back if necessary.
The transmission fee waiver will be available for projects commissioned by June 30, 2025 and the grid link will be provided as a priority.
Since the announcement of a hydrogen mission in the 2021 budget, several companies such as Reliance Industries Ltd, Adani Group, ACME Group, state-owned IndianOil and GAIL have announced green hydrogen plans.
“The government has attempted to meet some of the key industry demands for open access, banking network and faster approvals for green hydrogen and ammonia projects. Arrangements to install bunkers near ports for the export of green ammonia are particularly welcome,” said ACME Group Chairman Manoj K Upadhyay.
He said it would be important to build on the first phase with mandatory green hydrogen and ammonia purchase obligations to create initial demand. “At the same time, an equivalent of the PLI program for green ammonia is desirable to make India globally competitive.”
ACME has set up its first green hydrogen plant in Rajasthan and is investing up to $5 billion in a major plant in Oman.
Industries such as oil refineries and steel mills consume hydrogen, which they produce from natural gas or naphtha. While hydrogen itself is carbon-free, the use of fossil fuels results in carbon emissions.
Green hydrogen is produced by electrolysis of water using green energy. When green hydrogen is used, it emits oxygen, which can be filled into cylinders for supply to hospitals or other industries. Green ammonia is produced using green hydrogen.