Wind energy companies looking to Green Hydrogen for deliverance

India's wind energy industry is moribund, thanks to the unviably low tariffs thrown up in capacity auctions in the last 5 years. Tariffs at which wind energy companies would sell electricity to the government company, SECI (which would enter into back-to-back agreements with electricity utilities) fell to as low as Rs 2.44, before rising slightly to Rs 2.70 a kWhr.

Wind companies have long aspired for a tariff upwards of Rs 3 a kWhr. Now their wish is granted--in the form of green hydrogen. Many companies are considering saying "hell with auctions and long-term power purchase agreements" and instead use the electricity they generate to produce green hydrogen and thence green ammonia, which can be shipped to anywhere in the world.

"Green ammonia is a big market," observes Parag Sharma, Founder and CEO of O2 Power, a solar and wind company. He calculates that the difference in the prices of green ammonia and the ammonia produced through conventional proceses is about $ 200 a ton. 

The Ministry of New and Renewable Energy is working on providing financial and non financial incentives to urge renewable energy companies to get into green ammonia production. Financial incentives could be cash subsidies of about $ 50 - $100 a ton (though their compatibility with WTO rules is yet to be examined.) Non financial incentives could come in the form of making available land, allowing renewable energy companies to 'bank' their power for longer periods with the grid and so on.

At Windergy 2022, a conference-cum-expo even of the wind industry, which was held in New Delhi between April 27 and 29, many wind energy companies expressed a keen interest to get into green hydrogen. 

Clearly, (apart from direct sales of power to 'commercial and industrial' consumers), they are looking to green hydrogen for deliverance, because the 'tariff-based competitive bidding' as an instrument of rolling out wind power in India, has failed. According ot a report in the Business Line newspaper, of the 16,300 MW of capacity auctioned since late 2016, 12,740 MW has been awarded, but only 3,196 MW has actually come up. About 1,600 MW of capacity has been surrendered by winning wind energy companies, who calculate that losing the deposit money is better than going ahead with the projects at unremunerative, loss-guaranteeing tariffs. Another 2,000 MW could be surrendered.