India sets standard to kickstart power-to-X

India is set to close bidding in its first green hydrogen tender this week. This will give us a clear indication of how the private sector has received all of the policy support announced by the government in the last 12 months.

  • The Indian government last month defined what it means by 'green hydrogen'
  • SECI is due to close bidding in India's first green hydrogen tender this Friday
  • Power-to-X is set to be a major talking point at COP28 in Dubai in November

India’s Ministry for New & Renewable Energy started 2023 by approving a $2.1bn plan to establish the country as a global hub for green hydrogen production – and has spent most of the year delivering policies that will help it do exactly that.

Last month, the ministry released a standard defining ‘green’ hydrogen as having total emissions of less than 2kg carbon dioxide per kilogram of hydrogen produced. That includes the emissions used in water treatment, electrolysis, gas purification, drying and compression of hydrogen. This is similar to the definition in the US, and applies to hydrogen produced both by electrolysis and biomass-based methods.

This follows the framework that it released in June outlining the incentives it was making available for manufacturers of green hydrogen electrolysers and producers of green hydrogen. The Solar Energy Corporation of India is tasked with awarding the incentives, which are set to be allocated following competitive auctions. 

SECI is set to close bidding for the first of these tenders this Friday (7th September). This tender is aimed at supporting green hydrogen production facilities with total production capacity of 450,000 metric tonnes of green hydrogen per year, and is a key part of India’s $2.1bn National Green Hydrogen Mission announced in January. India sees this as helping it achieve a target of net zero carbon emissions by 2070.

This mission sets the goal for facilities in India to produce at least 5million tonnes of green hydrogen annually by 2030, backed by 125GW of renewables capacity, and to create 600,000 jobs. One way it is doing this is supporting the development of green hydrogen production hubs, with the Karnataka state government initiating the first of these clusters in India in 2022, near Mangaluru port.

Green hydrogen technology

Separately, the ministry unveiled a draft technology roadmap in July that committed the country to develop advanced storage methods for green hydrogen; methods to improve the reliability and durability of existing storage methods; and technology to address other safety concerns. These are all important areas for research as nations globally grapple how to transport green hydrogen over long distances and store it.

In addition, in September 2022, the Indian government revealed targets requiring oil refineries to replace 30% of their fuel use with green hydrogen by 2035, backed by an interim target of 3% in 2025; for 70% of fertiliser production to run on green hydrogen by 2035; and for urban gas distribution networks to replace 15% of their fuel volume with green hydrogen, also by 2035. This is important as it shows India has taken steps to increase the demand for green fuel as well as its production.

This can help India to build on growing business demand to create renewable fuels: Adani, Indian Oil, Reliance Industries and ReNew Power are all among those taking steps to get into the sector. And, in late August 2023, HSBC India teamed up with the Indian Institute of Technology Bombay and Shakti Sustainable Energy Foundation to make $2m of grants available for projects to support the growth of green hydrogen. The latter is not a huge amount of money, but it can still make a contribution.

And the government is not stopping there. It is reportedly in talks to supply 10million metric tonnes of green hydrogen annually to the European Union; and 5million metric tonnes of green ammonia, derived from green hydrogen, to Singapore. We expect to see more power-to-X policies at India prepared for the COP28 event in November.

Now breathe! Apologies for the policy overload.

Global ambitions

All too often in these columns we criticise governments for coming out with exciting targets for renewable energy and related projects, but then failing to back up those projects with policies. That is not the case for green hydrogen in India. The country has made big commitments to the technology, and has spent most of the last 12 months working frantically to put in place the frameworks needed to achieve them.

Analysis by think tanks NITI Aayog and RMI in June 2022 highlighted that favourable policies to increase green hydrogen demand would give private companies greater confidence to invest in production technology, as well as supporting renewables. We will now be able to see whether these policies have the desired effect.

This is no guarantee that India will establish itself as a global hub for green hydrogen production. It is a competitive market where the US, European Union and MENA are all coming out with their own policies. But the Ministry of New & Renewable Energy appears to be giving the country the best chance of success. 

We will keep a close eye on the country’s first green hydrogen tender to see how the private sector has responded.

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