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Explained - Green Hydrogen Policy 2022 | Indian Govt Step toward Clean Fuel

Honorable Prime Minister launched the National Hydrogen Mission on India's 75th Independence Day (i.e. 15th August, 2021). The Mission aims to aid the government in meeting its climate targets and making India a green hydrogen hub.

Explained-Green Hydrogen Policy 2022 and Indian Govt Step Forward toward Clean Fuel
Green Hydrogen Policy 2022

What is green hydrogen?

Green hydrogen is a type of hydrogen that has been made from water and organic matter. It is considered to be a clean and sustainable fuel because it does not produce greenhouse gases like carbon dioxide when it is burned.

The main benefits of green hydrogen include:

• It is environmentally friendly because it does not produce greenhouse gases.

• It is a sustainable fuel because it can be produced from water and organic matter.

• It is a cleaner fuel than gasoline or diesel, which are petroleum-based fuels.

How is the policy help to promote production of green hydrogen?

Green Hydrogen 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. This means that a green hydrogen producer will be able to set up a solar power plant in Gujarat to supply renewable energy to a green hydrogen plant in Jharkhand and would not be required to pay any inter-state transmission charges. This step is likely going to make it more economical for key users of hydrogen and ammonia to produce green hydrogen for their own use.

Points of India new Green Hydrogen Policy

The Government of India has had under consideration a number of policy measures in order to facilitate the transition from fossil fuel or fossil fuel-based feedstocks to Green Hydrogen/Green Ammonia both as energy carriers and as chemical feed-stock for different sectors. Here’s a list of points put across by the Government of India in this new Green Hydrogen Policy -

1. Green Hydrogen / Green Ammonia shall be defined as Hydrogen / Ammonia produced by way of electrolysis of water using Renewable Energy; including Renewable Energy which has been banked and the Hydrogen/Ammonia produced from biomass.

2. The waiver of inter-state transmission charges shall be granted for a period of 25 years to the producer of Green Hydrogen and Green Ammonia from the projects commissioned before 30th June 2025.

3. Green Hydrogen / Green Ammonia can be manufactured by a developer by using Renewable Energy from a co-located Renewable Energy plant, or sourced from a remotely located Renewable Energy plants, whether set up by the same developer, or a third party or procured renewable energy from the Power Exchange. Green Hydrogen/Green Ammonia plants will be granted Open Access for sourcing of Renewable Energy within 15 days of receipt of application complete in all respects. The Open Access charges shall be in accordance with Rules as laid down.

4. Banking shall be permitted for a period of 30 days for Renewable Energy used for making Green Hydrogen / Green Ammonia.

5. The charges for banking shall be as fixed by the State Commission which shall not be more than the cost differential between the average tariff of renewable energy bought by the distribution licensee during the previous year and the average market clearing price (MCP) in the Day Ahead Market (DAM) during the month in which the Renewable Energy has been banked.

6. Connectivity, at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green Ammonia shall be granted on priority under the Electricity (Transmission system planning, development and recovery of Inter State Transmission charges) Rules 2021.

7. Land in Renewable Energy Parks can be allotted for the manufacture of Green Hydrogen / Green Ammonia.

8. The Government of India proposes to set up Manufacturing Zones. Green Hydrogen / Green Ammonia production plant can be set up in any of the Manufacturing Zones.

9. Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up bunkers near Ports for storage of Green Ammonia for export / use by shipping. The land for the storage purpose shall be provided by the respective Port Authorities at applicable charges.

10. Renewable Energy consumed for the production of Green Hydrogen / Green Ammonia shall count towards RPO compliance of the consuming entity. The renewable energy consumed beyond obligation of the producer shall count towards RPO compliance of the DISCOM in whose area the project is located.

11. Distribution licensees may also procure and supply Renewable Energy to the manufacturers of Green Hydrogen / Green Ammonia in their States. In such cases, the Distribution licensee shall only charge the cost of procurement as well as the wheeling charges and a small margin as determined by the State Commission.

12. Ministry of New and Renewable Energy(MNRE) will establish a single portal for all statutory clearances and permissions required for manufacture, transportation, storage and distribution of Green Hydrogen / Green Ammonia. The concerned agencies/authorities will be requested to provide the clearances and permissions in a time-bound manner, preferably within a period of 30 days from the date of application.

13. In order to achieve competitive prices, MNRE may aggregate demand from different sectors and have consolidated bids conducted for procurement of Green Hydrogen/Green Ammonia through any of the designated implementing agencies.

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