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MNRE launches scheme to incentivise production of green hydrogen

Published: 27th Jan, 2024

MNRE launches scheme to incentivise production of green hydrogen

Context

Rs 17,490 crore has been set aside for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, to bolster domestic electrolyser manufacturing, green hydrogen production.

Accelerating India's Green Hydrogen Revolution: MNRE's SIGHT Programme

  • India is poised to revolutionize its energy landscape with the recent launch of the National Green Hydrogen Mission by the Union Ministry of New and Renewable Energy (MNRE).
  • The mission, backed by substantial financial allocations and incentives, aims to propel the adoption of green hydrogen as a key component of India's sustainable energy future.

Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme

  • Financial Commitment: Under the National Green Hydrogen Mission, a staggering Rs 17,490 crore has been allocated for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme. This initiative targets the augmentation of domestic electrolyser manufacturing and green hydrogen production.

Mode-2B: An Innovative Approach

  • Aggregating Demand: Implemented under Mode-2B, the SIGHT scheme adopts a strategic approach by aggregating demand and soliciting bids for green hydrogen production and supply. The competitive selection process aims to ensure cost reduction and rapid expansion.
  • Tranche I Capacity: Tranche I of Mode 2B offers a bidding capacity of 200,000 million tonnes per annum, creating significant opportunities for stakeholders in the green hydrogen sector.

Execution and Oversight

  • Role of MoPNG and CHT: The execution of the scheme will be entrusted to agencies nominated by the Union Ministry of Petroleum and Natural Gas (MoPNG), primarily oil and gas companies. The Centre for High Technology (CHT) will play a pivotal role in providing secretarial, managerial, and implementation support.

Industry Adoption and Initiatives

  • Indian Oil Corporation's Ambitious Plan: Leading the charge, Indian Oil Corporation announced plans last year to convert 50% of its grey hydrogen to green hydrogen by 2030. This involves establishing green hydrogen plants across all its refineries.
  • HPCL's Green Hydrogen Plant: Hindustan Petroleum Corporation is also actively contributing to the green hydrogen transition, with the construction of a 370 tonnes per annum green hydrogen plant at its Visakhapatnam refinery.

Incentives and Criteria

  • National Green Hydrogen Standard: To qualify for incentives under the scheme, bidders must meet the criteria outlined in the 'National Green Hydrogen Standard' as notified by MNRE.
  • Direct Incentives: The scheme offers a direct incentive over three years from the commencement of production and supply. Rates include Rs 50/kg of green hydrogen in the first year, Rs 40/kg in the second year, and Rs 30/kg in the third year.

Monitoring and Challenges

  • Scheme Monitoring Committee: A scheme monitoring committee, co-chaired by key officials from MoPNG and MNRE, along with experts, will oversee the implementation and performance of capacities awarded or established under the scheme. It will also address challenges and recommend measures.
  • World Economic Forum Report: A recent report by the World Economic Forum highlighted limited on-the-ground traction for green hydrogen in India, with key players adopting a cautious 'wait-and-watch' approach.

Way Forward:

India's National Green Hydrogen Mission, with the SIGHT programme at its core, signifies a pivotal step towards a sustainable and low-carbon energy future. As the country strategically invests in green hydrogen, balancing innovation with incentives, the transition holds promise for substantial environmental gains and economic growth. The coming years are poised to witness a transformative shift in India's energy narrative, ushering in an era of green hydrogen prominence.

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