Govt plans grants for green hydrogen in heavy mobility

In what will help provide a push to India’s ambitious green hydrogen plans, the governments plans to provide viability gap funding (VGF) or grants for green hydrogen in heavy mobility, said union power and new and renewable energy minister Raj Kumar Singh.

This comes in the backdrop of the union government’s plans to implement the Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining, similar to what was done with renewable purchase obligations (RPO). Apart from providing grid-scale storage solutions and feedstock for ammonia production, hydrogen can be used for fuel cell and is being leveraged for mobility applications and transportation.

 “The Minister informed that government is proposing to come out with mandates for green hydrogen purchase obligations in refining and fertilizers starting with 10 percent which will be increased later  to 20-25 percent. With time by adding more and more volume the price will reduce and the mandate will no longer be required. He added that we are also proposing to come up with Viability Gap Funding(VGF) for green hydrogen in heavy mobility and are also eyeing other sectors such as steel,” ministry of new and renewable energy said in a statement.

VGF can provide a push to India’s infrastructure-creation plans through public-private partnerships.With the current cost of green hydrogen produced by electrolysis estimated at around  ₹350 per kg, India’s green hydrogen playbook plans to bring it down to  ₹160 per kg by 2029-30. 

Green hydrogen also has usage in sectors such as chemicals, iron, steel, fertilizer, refining, and heating. India plans to shortly kick-start the play by calling bids for 4 GW electrolyser capacity and extending the production-linked incentive (PLI) scheme for manufacturing electrolyzers. Apart from GHCO on the lines of RPOs that require electricity distribution companies to buy a fixed amount of renewable energy to cut reliance on fossil fuels; the draft Electricity Rules, 2021 floated by union power ministry have allowed green hydrogen purchase to help meet RPOs.

 “India’s NDC (Nationally Determined Contributions) is to increase the share of non-fossil fuels to 40% of the total electricity generation capacity by 2030  but at the current rate we might be able to achieve almost 50  percent from non fossil fuel by 2030,” Singh said in the statement.

In what may strengthen India’s climate commitment credentials in the run up to UN Climate Change Conference (COP-26), its emissions have been reduced by 28% over 2005 levels, against the target of 35% by 2030. India is also the only major economy with actions in line with keeping global warming below 2°C of pre-industrial levels and the only G20 country whose energy transition is in sync with this goal, according to the Union government.

 “India is among one of the few countries globally which has kept to its Paris Climate Change (COP21) commitments along with an exponential increase in renewable energy capacity. Considering the pace of development in the energy sector, India is determined to not only achieve, but to exceed its NDC commitments well within the committed time frame. This was stated by Union Minister of Power and New & Renewable Energy, Shri RK Singh in his keynote address,” the statement said.

This comes against the backdrop of the country resisting the pressure of declaring a net zero emission goal. Instead, India has called out nations on their carbon neutral intent announcements and termed them ‘meaningless’.