As Indian federal government’s annual budget revelation, which happens on February 1 every year comes closer, much focus has been on what the finance minister will say or do for green hydrogen.
In this context, the power minister, Mr R K Singh, has been quoted by the Indian Express newspaper as saying that electricity meant for producing green hydrogen would be allowed to be transmitted to the electrolyzer plant free of any transmission charges.
This, the minister said at a recent conference organized by the Confederation of Indian Industry (CII) that the National Green Hydrogen Policy document would be brought out very soon – perhaps days after the Budget.
Minister R K Singh
In the green hydrogen policy “we are saying that we will give free transmission of electricity for 25 years,” the Indian Express report quotes Singh as saying. The minister said that one could generate power in Rajasthan and transport it to Guwahati and produce green hydrogen there,” free of transmission charges.
Giving a sneak preview about the policy, the minister said that it would provide for lands in renewable energy parks and bunkers at ports for storage of green hydrogen and green ammonia, with a view to making India a green hydrogen production centre for the whole world.
Meanwhile, many experts have predicted that the Budget would provide incentives for green hydrogen. A report in Financial Express quotes Venkatesh Raman Prasad, Partner in the law firm, J Sagar Associates, as saying that “While 2021 saw the launch of National Hydrogen Mission, it is likely that the Budget may provide for targeted fiscal incentives for R&D in green hydrogen segment, creation of domestic supply chain for hydrogen and reduce customs duties on electrolysers to boost green hydrogen production.” says Venkatesh Raman Prasad, Partner, J Sagar Associates (JSA).
Prasad is of the view that India’s commitment at COP 26 of achieving net zero emissions by 2070 and meet 50 per cent of energy requirements from renewable energy by 2030 shows that the government intends to focus on cleaner sources of energy.
Hemant Mallya, Senior Programme Lead, Council on Energy, Environment and Water (CEEW) opines that green hydrogen has many industrial uses and can potentially decarbonise many hard-to-abate sectors, like the iron and steel industry. He says that an outlay of Rs 1,200 crore by 2024 in the upcoming Budget could trigger pilots in various end-use applications such as testing green hydrogen readiness of natural gas pipelines, underground hydrogen storage, and pilots for equipment such as furnaces, boilers, and process heaters.
He suggests that another Rs 165 crore could support R&D, especially on catalysts and electrolyser membranes, finding substitutes for critical minerals, setting up testing labs and enforcing safety standards. These investments would help indigenize green hydrogen production and use as an industrial fuel, he opines.
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