Government Looking To Introduce PLI Scheme For Green Hydrogen Production


Speaking at a virtual event, Union Minister of New and Renewable Energy (MNRE) RK Singh said that green hydrogen could play a critical role in decarbonising the heavy-duty transport sector.


The Union Minister of New and Renewable Energy (MNRE) RK Singh, announced that the government was developing a production linked incentive (PLI) programme for manufacture of indigenous electrolysers and that the ministry was also proposing Viability Gap Funding (VGF) for green hydrogen in heavy mobility.

The minister stated that green hydrogen could play a critical role in decarbonising the heavy-duty transport sector, especially given that batteries are not yet economically viable for this application. He added that the government was planning to offer VGF towards this effort. The government was also planning to convert two ships to run on green ammonia as pilot projects.

The Minister also informed that the government was proposing to come out with mandates for green hydrogen purchase obligations in refining and fertilisers starting with 10 per cent which would be increased later to 20-25 per cent. This measure would be similar to the Renewables Purchase Obligation (RPO) in the power sector. The minister further stated that with time, by adding more and more volume, the price would reduce and the mandate would no longer be required.

These would create the necessary demand and lead to economies of scale for critical technologies like electrolysers. The initiative would first target the establishment of 10 GW of domestic manufacturing capacity.

While giving a keynote address in a virtual event conducted by Council on Energy, Environment and Water (CEEW) the minister mentioned the various initiatives introduced by the government to transition to greener energy. He opined that at the current speed at which transition to renewables was taking place, India may be able to achieve 50 per cent electricity generated from renewables by 2030, far exceeding its nationally determined contribution (NDC) at 40 per cent.

The secretary of MNRE informed that the ministry was in the process of producing a vision document for the green hydrogen sector.

The Prime Minister last month had announced a national green hydrogen mission. Other recent developments to push green hydrogen include National Thermal Power Corporation (NTPC) inviting global tenders for hydrogen blending in city-gas distribution network on a pilot basis. NTPC has also expressed its interest to generate hydrogen on a commercial basis from its new solar park in Gujarat.

The power ministry, in its new draft electricity rules published last month, made green hydrogen eligible for RPO by DISCOMS, essentially classifying it as renewable energy. Apart from measures being taken by the government, the private sector has also announced various programmes to manufacture green hydrogen.