The Union government on this Thursday had announced the green hydrogen and green ammonia policy that will be aimed at boosting the domestic production of green hydrogen to 5 million tonnes by the year 2030 and will make India an export hub for the production of clean fuel.
Green Hydrogen is a type of hydrogen gas that is produced through the electrolysis of water which is an energy-intensive process for splitting the water into hydrogen and oxygen and this will be done using renewable power energy. The new policy made by the government offers 25 years of free power transmission for any fresh renewable energy plants that will be set up for the supply of power for the production of green hydrogen before July 2025.
This means that any green hydrogen producer will be able to set up a solar power plant, for instance, in Rajasthan for the supply of renewable energy to another green hydrogen plant that might be located in Assam, and this process would not require him to pay any inter-state transmission charges. This move will make it more economical for key users of hydrogen and ammonia including refining, fertiliser, and steel sectors to the production of green hydrogen for their use. These sectors are currently using grey hydrogen or grey ammonia that is produced using natural gas or naphtha.
The Union Government is all set to provide a single portal for all the clearances that are required for the setting up of green hydrogen production along with a facility for producers to bank any additional renewable energy that would be generated with discoms for up to 30 days and can be used as required.
As per Vikram Kirlosar, chairman of the CII Taskforce on Green Hydrogen, the requirement of time-bound clearances for these projects would lead to spur in investment and the grid connectivity on priority will ease out the operational processes. The energy plants set up to produce green hydrogen/ ammonia would be given connectivity to the grid on a priority basis, as per the statements by the Power Ministry.
Power Distribution Companies will now be able to procure renewable energy to supply green hydrogen producers but at the same time will be required to do so at a concessional rate which will only be inclusive of the cost of procurement, wheeling charges, and a small margin that will be decided by the state commission under the new policy. These types of procurements will also be counted towards a State’s Renewable Purchase Obligation (RPO) under which it will be required to procure a certain amount of its requirements from renewable energy sources.
Under the new policy, the port authorities will be providing land at applicable charges to producers of green hydrogen and green ammonia for setting up bunkers near ports for storage before export. RK Singh, the Power Minister had earlier stated that Germany and Japan could be the key markets for green hydrogen produced in the country.