India's Hydrogen Strategy Update – Indian government adopts National Green Hydrogen Mission

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published on 28th February 2023



On 4 January, the Indian government adopted the National Green Hydrogen Mission  ("NGHM"), thus revealing more details of India's hydrogen strategy, which was already announced in 2021 and further concretised in 2022. One of the NGHM's goals is to achieve a production capacity for green hydrogen of at least 5 MMT by 2030, with an associated renewable energy capacity addition of about 125 GW.


Introduction:

The NGHM presents a comprehensive action plan for the development of infrastructure for green hydrogen, in particular to structure and regulate the market. Overall, INR 197.44 million will be made available for the NGHM.

The overarching objective of the NGHM is to make India the Global Hub for production, usage and export of green hydrogen and its derivatives and thus reduce India's dependence on fossil fuel imports.

The NGHM therefore mandates various central and state agencies to implement the NGHM, with the responsibility for the overall coordination resting with the Ministry of New and Renewable Energy. As part of this process, also the sector-specific ministries will send regular reports to the Ministry of New and Renewable Energy, in which they will document progress of the expansion of green hydrogen in their respective sectors.


Summary of the National Green Hydrogen Mission:

 

The key highlights of the NGHM's planned measures are summarised as follows:

  • Stepwise implementation of the NGHM, whereas the NGHM is divided into two phases: Phase I (2022-23 to 2025-26) aims to create demand for green hydrogen (with a focus on certain hard-to-reach sectors) and reduce the overall cost of green hydrogen. Furthermore, a legal framework, standards and norms are to be created. Phase II (2026-27 to 2029-30) will focus on the development of R&D projects, initiatives to further spread green hydrogen in newer sectors, and the development of pilot projects. 
  • Necessary legislation will be created through the Indian Energy Conservation Act to ensure the enforceability of the NGHM's targets. The Energy Conservation Act will also empower the central government to set a minimum share of consumption of energy and feedstock consumption from non-fossil fuel-based sources that an industry must ensure.
  • As part of the NGHM, a transparent bidding and procurement procedure known from other renewable energy areas will be introduced. Furthermore, a suitable regulatory framework for the certification of green hydrogen will be developed. The bidding guidelines will be technology-agnostic.
  • Various incentives will be offered, especially to support domestic manufacturing of electrolysers and the production of green hydrogen. To be eligible for incentives, the project must utilize equipment approved by the government of India as per specified quality and performance criteria. An approved list of models and manufacturers will be
    notified by the Indian government.
  • Green Hydrogen Hubs will be created.
  • In order to facilitate the feed-in of electricity from renewable energy sources, various existing measures concerning renewable energies will be extended to include hydrogen projects. This will include waiving interstate transmission charges, facilitating obtaining banking financing, and guaranteed time-bound connection to the grid and open access.
  • Existing procedures relating to statutory approvals and permissions will be streamlined and new procedures will be introduced where necessary. The focus will be on 'Ease of Doing Business'. Procedures will be simplified and approvals will be expedited through the use of technology. Regulations and standards will be aligned with internationally accepted norms.  Efforts are already being made by the Bureau of Indian Standards to create a normative and regulatory framework. All regulatory provisions (or amendments to existing regulations) to permit operation of hydrogen fuelled vehicles and other applications will be notified within twelve months. A web-based portal will be developed with the database of all relevant regulations and standards pertaining to Hydrogen at the Central and State levels.
  • Further measures regarding public awareness and stakeholder outreach, R&D and skills development are planned.

Conclusion:

 

The Indian government has rightly recognised the need to increase demand for renewable energy and especially green hydrogen for the NGHM to be a success. In this respect, the NGHM is rightly focusing on measures to directly and indirectly increase demand. In doing so, India remains true to its long-term goal of "Make-in-India" and improving the "Ease-of-Doing-Business".


India is a country where rapid changes are possible. Providing financial and non-financial incentives would reduce the risk for first movers on the market and contribute even more to scaling the sector.


India's energy demand is steadily increasing, and dependence on fossil fuels, especially those that have to be imported, continues to be a problem. Therefore, the Indian government is supporting the renewable energy market with the National Green Hydrogen Mission in addition to the existing National Solar Mission and the National Wind Energy Mission. 



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