A top government official said that India aims to provide green hydrogen incentives (fuel producers) worth at least 10% of their costs under a USD2 billion initiative that would begin by the end of June.
To reduce carbon dioxide emissions and become a major exporter in the sector, New Delhi authorized a 174.9 billion rupee incentive scheme this year. (Green hydrogen incentives )
The government will provide incentives of at least 30 Indian rupees per kilogram (kg) for the development of green hydrogen fuel, according to a government official who is directly involved but declined to be identified since the discussions are secret.
In India, the cost of producing green hydrogen, which is produced using renewable energy rather than power sourced from fossil fuels, is now around 300 rupees per kilogram.
The government will give approximately 130 billion rupees for producing green hydrogen, with the remainder going to manufacturers of electrolyzers, which are used to split hydrogen and oxygen molecules using electricity.
India has set an aim of obtaining half of its installed electrical capacity from non-fossil fuel sources by 2030 and achieving net-zero carbon emissions by 2070.
When Reuters inquired for comment on the initiative, India’s Ministry of New and Renewable Energy and Press Information Bureau did not answer quickly.
According to the source, the government will begin bidding for enterprises seeking incentives before the end of this quarter, and the incentives would be reduced every year. The government aims to fund 3.6 million tonnes of hydrogen production capacity over the next three years under the scheme.
According to the official, the government will welcome bids in three tranches for green hydrogen supply and two tranches for electrolyzers, which will help gather market insights, absorb new technologies, and generate cost savings.
The green hydrogen supply auction is scheduled to be offered to enterprises with renewable energy facilities or that produce hydrogen and ammonia.
According to the source, the contracts will be awarded to the companies with the lowest incentive. Indian corporations who have already declared plans for green hydrogens, such as Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW Energy, ReNew Power, and Acme Solar, are expected to be interested in the contracts.
According to the official, each tranche for the manufacture of electrolyzers will likely be for 1,500 MW of capacity, with the incentive set at 4,440 rupees per kilowatt.