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Hydrogen policy calls for more incentives: experts

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Hydrogen policy calls for more incentives: experts

  • The Ministry of Power has notified the first part of the National Hydrogen Mission policy on green hydrogen and green ammonia
  • Aim: to boost production of hydrogen and ammonia using renewable energy.

What is green hydrogen?

  • Green hydrogen is hydrogen gas produced through the electrolysis of water.
  • It is an energy-intensive process for splitting water into hydrogen and oxygen— using renewable power to achieve this.
  • Green hydrogen results when the electricity is produced from a non-fossil fuel source such as solar or wind energy but this is currently uneconomical and new policy aims to make this more viable.

Key takeaways of the Green Hydrogen Policy

  • The new policy offers 25 years of free power transmission for any new renewable energy plants set up to supply power for green hydrogen production before July 2025.
  • Green hydrogen producers will be able to set up a solar power plant in Rajasthan to supply renewable energy to a green hydrogen plant in Assam.
  • It would not be required to pay any inter-state transmission charges.

What are the incentives?

  • Single portal for all clearances required for setting up green hydrogen production.
  • It will facilitate producers to transfer any surplus renewable energy generated with discoms for up to 30 days and use it as required.
  • The requirement of time-bound clearances for these projects would spur investment while grid connectivity on priority will ease operational processes.
  • The energy plants set up to produce green hydrogen/ammonia would be given connectivity to the grid on a priority basis.
  • State DISCOMS may also procure renewable energy to supply green hydrogen producers but will be required to do so at a concessional rate.
  • Such procurement would also count towards a state’s Renewable Purchase Obligation (RPO) under which it is required to procure a certain proportion of its requirements from renewable energy sources.

Government target

  • Target: setting up a 5 million tonnes (mt) green hydrogen production by 2030.
  • Hydrogen only emits water as a residue when burnt
  • It is pitched as a potential substitute for fossil fuel and help in India's transition away from polluting fuel sources.

Why such a move?

  • The move will make it more economical for key users of hydrogen and ammonia such as the oil refining, fertiliser and steel sectors to produce green hydrogen for their own use.
  • These sectors currently use grey hydrogen or grey ammonia produced using natural gas or naphtha.

Conclusion

  • The reality is solar alone cannot be a sole green hydrogen producer as there are certain inherent limitations in power balancing calculations.
  • The government needs to create highly motivating new incentives in research and development for green hydrogen

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