The Indian Ministry of New and Renewable Energy (MNRE) has introduced a framework for incentive implementation to encourage the annual production of 200,000 metric tonnes (MT) of green hydrogen. The MNRE may determine any additional capacity for subsequent phases, if applicable. The incentives will be awarded for a duration of three years.
The incentives for producing and delivering cost-effective green hydrogen to refineries through a competitive selection process fall under Mode 2B of the strategic interventions for green hydrogen transition (SIGHT) initiative. The programme, encompassing all modes, has a comprehensive budget of Rs 130.5 billion. During the initial year, the incentive stands at Rs 50 per kg, followed by Rs 40 per kg in the second year, and further reduced to Rs 30 per kg in the third year. The incentives under the SIGHT programme cannot simultaneously qualify under two distinct modes. The assigned capacity will remain unchanged throughout the duration of the purchase agreement.
It has further established the incentive implementation structure for generating and delivering green ammonia at the most economical rate through a competitive selection procedure within mode 2A of the SIGHT initiative. Within this framework, direct incentives for the production and distribution of green ammonia will be provided over a span of three years from the date of commencement. During the initial year, the incentive stands at Rs 8.82 per kg, followed by Rs 7.06 per kg in the second year, and further reduced to Rs 5.30 per kg in the third year.
REGlobal’s Views: The Indian government has been quite proactive in promoting uptake of green hydrogen for domestic consumption and export. A national mission has been formulated, transmission charges have been waived off, and incentives have also been announced to promote development of green hydrogen facilities. Meanwhile, a green hydrogen auction has been recently conducted successfully. The country is now witnessing various large projects in this space with interest from both public and private sector firms.
