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Business News/ Industry / Energy/  Hydrogen policy launch today, companies set to get open access
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Hydrogen policy launch today, companies set to get open access

The policy is aimed at boosting green hydrogen production in the country. The fuel can be a game changer for the energy security of India, which imports 85% of its oil and 53% of gas requirements

India’s strategy is to leverage scale for its ambitious green hydrogen plan on the likes of its renewable energy programme, leading the country to run the world’s largest clean energy programme.Premium
India’s strategy is to leverage scale for its ambitious green hydrogen plan on the likes of its renewable energy programme, leading the country to run the world’s largest clean energy programme.

NEW DELHI : India will launch the first part of the much-awaited National Hydrogen Policy on Thursday, said power and new and renewable energy minister Raj Kumar Singh on Wednesday.

The policy is aimed at boosting green hydrogen production in the country. The fuel can be a game changer for the energy security of India, which imports 85% of its oil and 53% of gas requirements.

Addressing a conference on 'India’s Leadership in Energy Transition' here, the minister said that the first part of the policy to be unveiled would include components which would be implemented by the government immediately and the second part is currently with the Expenditure Finance Committee. 

Singh said that under the policy, government will give companies the "liberty to set up renewable energy capacity anywhere by themselves or through a developer".

Mint earlier reported about India considering a proposal to make it mandatory for fertilizer plants and oil refineries to use green hydrogen as part of plans to cut the nation’s dependence on fossil fuels. India’s strategy is to leverage scale for its ambitious green hydrogen plan on the likes of its renewable energy programme, leading the country to run the world’s largest clean energy programme.

"We will give them open access," Singh said, adding that the government will also allow banking or storage of excess green hydrogen produced by any company for up to 30 days, in case of capacities which are set up before 2025.

Green hydrogen is produced by splitting water into hydrogen and oxygen using an electrolyzer that may be powered by electricity from renewable energy sources such as wind and solar. Hydrogen can be used for both fuel cell and internal combustion engines. It is also being leveraged for applications in sectors such as chemicals, iron, steel, transport, heating and power.

This comes at a time when the clean energy, environment protection and energy transition have taken centre-stage in India's government policies, with Prime Minister Narendra Modi committing at COP26 summit, Glasgow last year to become carbon neutral by 2070.

Government would also mandate usage of green hydrogen and green ammonia under the upcoming policy in a phased manner, he said. This mandate would however require Cabinet approval, he added.

Indian firms, including Reliance Industries Ltd, Adani Group, Greenko and Acme Solar Holdings Ltd, have announced their green hydrogen plans. Around 54% or 3.6 mmt of India’s annual hydrogen consumption of 6.7 mmt is utilized in petroleum refining and the rest in fertilizer production. This is, however, ‘grey’ hydrogen produced from fossil fuels such as natural gas or naphtha. 

Noting that that several countries including Japan and Germany are interested in procuring green hydrogen from India, Singh asked the industry to visit those countries to analyse the market opportunities.

In 2021, the government announced the National Hydrogen Mission in order to promote the generation and adoption of cleaner energies including green hydrogen. The government 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). RPOs require electricity distribution companies to buy a fixed amount of renewable energy to cut reliance on fossil fuels. India’s total hydrogen demand is expected to touch 11.7 million metric tonnes (mmt) by 2029-30 from the current 6.7 mmt.

India has also of late engaged in bilateral partnerships in order to enhance technologies for clean energy. On Tuesday, February 15, India and Australia signed a letter of intent (LoI) on new and renewable energy technology aimed at scaling up manufacturing and deployment of ultra-low-cost solar and clean hydrogen. In January, India and Denmark agreed to initiate joint research and development on green fuels including green hydrogen.

During the International Solar Alliance (ISA) assembly, a solar hydrogen programme was also launched to produce the emission-free fuel at $2 per kg, sharply lower than the present price of $5 per kg. Further, in a bid to expand the adoption of green energy, Centre is also exploring a plan to run ships on green energy that may involve a hybrid energy model comprising of a mix of solar, sea water, wind, and hydrogen as reported by Mint earlier.

On Wednesday, the minister also said that the government would extend the ongoing Renewable Purchase Obligation (RPO).

"We are going to come up with rules. We have a draft under consideration, in which we are providing that the RPO obligation laid down by the Central Government shall be followed," Singh said.

He added that the government is considering to increase penalties for non-compliance of RPOs, through amendment to the Electricity Act. Further, the new rules would include the target of 500 GW of renewable energy and storage would also be brought under the ambit of the RPO.

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Published: 16 Feb 2022, 08:45 PM IST
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