Green hydrogen manufacturing to come under PLI scheme: R K Singh

The Centre will bring in a production-linked incentive (PLI) scheme in coming months to give impetus to manufacturing of green hydrogen and its key component electrolyser, Union Power, New, and Renewable Energy Minister R K Singh said on Thursday.

The minister was speaking a day after the Union Cabinet approved an initial outlay of Rs 19,744 crore for the National Green Hydrogen Mission.

One of the key tenets of the mission is allocation of Rs 17,490 crore for strategic interventions for green hydrogen transition (SIGHT) programme. Under SIGHT, there will be two financial incentive mechanisms for the domestic manufacturing of electrolysers and the production of green hydrogen.

“We would provide incentive through a PLI scheme. We are aiming to make India the most competitive source of green hydrogen in the world,” Singh said, adding that 15 gigawatt (Gw) of electrolyser capacity would be needed to meet the annual 5 million tonne production target of green hydrogen.

While the industry is looking forward, it faces a challenge of the developed world providing subsidies to the green hydrogen sector, he said. “We believe that to be a trade-distorting step, which I think is actionable under the WTO rules.”

The mission will have four components that aim at enhancing domestic production of green hydrogen and promote the manufacturing of electrolysers — a key constituent for making green hydrogen. Apficiasart from the SIGHT programme, Rs 1,466 crore is for pilot projects, Rs 400 crore for research and development (R&D), and Rs 388 crore towards other mission components, the Centre said in a statement.

Officials at the ministry of new and renewable energy (MNRE) said the four pilot projects for use of green hydrogen are for low carbon steel, mobility, shipping and decentralised energy and energy storage solutions.

In February last year, the Ministry of Power notified the green hydrogen/ammonia policy at a production of 5 mt of green hydrogen by 2030. The same target remains in the final mission as well.

According to the policy drafted by the Ministry of Power, green hydrogen/ammonia manufacturers can set up green energy projects or procure the same from energy exchanges. Several waivers, including interstate transmission charges, ease of getting open access, and transmission connectivity, were provided under the policy.

Singh said the Centre will specify a minimum share of consumption of green hydrogen or its derivative products such as green ammonia, green methanol etc. by designated consumers.

The nodal department for the mission will be the Ministry of New and Renewable Energy. To meet the 5 mt target, it is expected an associated renewable energy capacity of close to 125 gigawatt will be required. The Centre expects close to 50 mt per annum of carbon emissions to be averted by 2030.