Modi Cabinet Approves Rs 19744 cr For Green Hydrogen Initiatives

The government’s Green Hydrogen Mission for India got a shot in the arm with the formal approval of Rs 17,490 crore for the same by the Union cabinet today.  The allocation is expected to be used for a special PLI (Performance Linked Incentive) scheme for manufacturing a base for electrolysers and other related equipment for green hydrogen manufacturing in India.

The PLI route has become the preferred route for incentivising firms towards the governments make in India push, after meeting significant success in the electronics and more recently, solar sector too.

The National Hydrogen Mission was announced in Budget Speech of FY 2021-22 to produce the hydrogen from green energy sources. The scheme was announced putting Green Hydrogen at the heart of India’s energy security and climate change and jobs in clean energy.

Announcing the initiative formally, Anurag Thakur, Minister of Sports, Youth Affairs and Minister of Information and Broadcasting, said that by 2030, 5 million tonnes of green hydrogen will be produced annually by establishing electrolyser capacity of 60 to 100 GW, along with incentives for producing this equipment. Incentives will be available till 2029-30 on electrolyser manufacturing, and secondly on Green hydrogen output.

Rs 1466 crore has also been provided for pilot projects.

An empowered group of experts will also be set up to advise on technical issues. Ministry of New and Renewable Energy (MNRE) will get a Mission secretariat with the professional director.

According to a report by TERI, in 2020, India’s hydrogen demand stood at 6 million Tons (MT) per year. $2 per kg has become the holy grail for Green Hydrogen costs to end users, from the existing range of $6 to $8. At that level, both demand and export opportunities out of India are expected to be huge, and a high contributor to make the country energy independent by 2047 as targeted.

While firms like Ohmium have already started making electrolysers in India, a huge push is expected from the likes of the Reliance and Adani Groups, among others, to manufacture the full equipment supply chain here as the country bets on Green hydrogen to clean up energy intensive industries, besides other areas like replacing gas use where possible. Green hydrogen manufacture is also expected to account for a significant chunk of the 280 GW  plus of solar power capacity targeted by 2030, with NTPC itself allocating 5 GW of its 60 GW renewable capacity for green hydrogen and ammonia. Multiple other developers have also announced plans to get into the segment, so expect a lot of announcements going ahead.