Green Hydrogen plants to get free interstate power transmission under Hydrogen policy

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Green Hydrogen plants to get free interstate power transmission under Hydrogen policy

  • The green hydrogen/ ammonia policy was announced to reduce carbon emissions and boost domestic production of green hydrogen to 5 million tonnes by 2030
  • Renewable energy plants set up before 2025 to power the production of green hydrogen or green ammonia will get free inter-state power transmission for 25 years.

About the policy

  • Objective: to reduce fossil fuel usage and increase penetration of green fuels
  • to make India an export hub for green hydrogen and green ammonia
  • It gives companies the liberty to set up renewable energy capacity anywhere by themselves or through a developer.
  • It promotes renewable energy generation as RE will be the basic ingredient in making green hydrogen
  • Renewable energy plants of green hydrogen and green ammonia producers will be given connectivity to the grid on a priority basis
  • These will be permitted to bank surplus energy with discoms for 30 days, and withdraw it as required.
  • It provides for a “waiver of inter-state transmission charges for a period of 25 years for manufacturers of green hydrogen and green ammonia for the projects commissioned before June 30, 2025
  • The production of green hydrogen/ammonia will be considered against the manufacturer’s Renewable Purchase Obligation (RPO)
  • It will also be applicable even for discoms using such renewable energy.
  • Hydrogen and Ammonia produced from biomass or a renewable energy source that has been banked will also be considered as “green” hydrogen and “green” ammonia.

Significance of Policy

  • It will provide clean fuel to the common people of the country.
  • It will reduce dependence on fossil fuel
  • It will also reduce crude oil imports
  • It will help in meeting India’s international commitments for clean energy

Green Hydrogen

  • It is produced using renewable energy through electrolysis.
  • It is a clean energy source as it only emits water vapour and leaves no residue in the air, unlike coal and oil.
  • It has been used to fuel cars, airships and spaceships since the beginning of the 19th century.

Advantages of Green Hydrogen

  • 100 % sustainable: it does not emit polluting gases either during combustion or during production.
  • Storable: it is easy to store, which allows it to be used subsequently for other purposes and at times other than immediately after its production.
  • Versatile: it can be transformed into electricity or synthetic gas and used for domestic, commercial, industrial or mobility purposes.
  • Transportable: it can be mixed with natural gas at ratios of up to 20 % and travel through the same gas pipes and infrastructure

Disadvantages of Green Hydrogen

  • High cost: energy from renewable sources, which are key to generating green hydrogen through electrolysis, is more expensive to generate, which in turn makes hydrogen more expensive to obtain.
  • High energy consumption: the production of hydrogen in general and green hydrogen in particular requires more energy than other fuels.
  • Safety issues: hydrogen is a highly volatile and flammable element and extensive safety measures are therefore required to prevent leakage and explosions.

Way forward

  • It's a much-needed initiative and now state governments should take the cue from this policy and extend benefits such as waiver of intra-state transmission charges and electricity duty.
  • The policy also needs to address the expectations of hydrogen producers by providing clarity on demand side measures such as hydrogen purchase obligations and there should be clarity on derivatives of green hydrogen other than green ammonia, such as methanol