Following up on the launch of the National Hydrogen Mission, the power ministry has notified the first phase of India’s Green Hydrogen Policy, introducing several measures to ease adoption and promote green hydrogen/ ammonia manufacturing. The key policy provisions for green hydrogen/ ammonia manufacturing include a waiver of interstate transmission charges for 25 years, grant of open access within 15 days of receipt of application, and banking (for up to 30 days) of renewable energy used for green ammonia/hydrogen manufacturing. Manufacturers will also be allowed to set up bunkers near ports for the storage of green hydrogen/ammonia.
While the policy is expected to bring down the cost of green hydrogen/ ammonia manufacturing and promote India as a manufacturing hub, the industry awaits demand-side provisions to promote green hydrogen/ ammonia uptake and incentives for manufacturing hydrogen electrolysers.
In another development, the union finance minister has announced several provisions for transitioning to clean energy and mitigating climate change under the Union Budget 2022. To facilitate domestic manufacturing of solar modules and reduce import dependence, the budget has enhanced the funding under the production-linked incentive scheme for manufacturing high-efficiency solar modules to Rs 240 billion from the existing Rs 45 billion. In the EV space, the budget has proposed a battery swapping policy and inter-operability standards, which will enable the building of a vast energy-operator supply chain network and the evolution of innovative business models of battery-as-a-service. Besides this, in order to reduce the carbon footprint of TPPs as well as stubble burning in agricultural fields, the union government has proposed 5-7 per cent co-firing of biomass pellets in TPPs. On the green financing front, the union budget has proposed sovereign green bonds as a part of the government’s overall market borrowings during 2022-23. The proceeds will be deployed in public sector projects that help in reducing the carbon intensity of the economy.
This month’s cover story analyses in greater detail the key proposals of the Union Budget 2022 for the power and renewable energy sectors.