New Delhi: The Centre on Thursday notified a policy to promote the production of hydrogen and ammonia by using renewable energy sources such as solar or wind power. This was done in order to fast-track the production of environment-friendly hydrogen and ammonia in the country and replace the use of fossil fuels as well as reduce the country’s dependence on imported crude oil.
The policy notified by the Ministry of Power aims to make the country a hub for the production and export of green hydrogen by meeting the target of production of 5 million tons of green hydrogen by 2030. The target includes the development of related renewable energy as the use of renewable sources of power is one of the key conditions for the production of green hydrogen and ammonia.
“Hydrogen and Ammonia are envisaged to be the future fuels to replace fossil fuels. Production of these fuels by using power from renewable energy, termed as green hydrogen and green ammonia, is one of the major requirements towards environmentally sustainable energy security of the nation,” said the Ministry of Power.
Policy framework to boost production of green hydrogen
In the policy, the government has announced a series of measures to boost production of hydrogen and ammonia through renewable energy such as allowing hydrogen and ammonia producer priority in purchasing renewable power from power exchanges or permission to set up renewable power stations themselves or in partnership with other developers anywhere in the country.
Officials said open access will be granted within 15 days of receipt of application in such cases. Moreover, the producers of green hydrogen and ammonia will be able to bank unconsumed renewable power for a period of 30 days with the power distribution company and take it back when required. Distribution licensees can also procure and supply renewable energy to the manufacturers of green hydrogen and green ammonia in their states at concessional prices which will only include the cost of procurement, wheeling charges and a small margin as determined by the state Commission. The government has also waived of inter-state transmission charges for a period of 25 years for the green hydrogen and green ammonia producers if their projects are commissioned before June 30, 2025.
Secondly, the manufacturers of green hydrogen and ammonia and the renewable energy plant shall be given connectivity to the grid on priority basis to avoid any procedural delays. The benefit of Renewable Purchase Obligation (RPO) will be granted incentive to the hydrogen and ammonia manufacturers and the distribution licensee for consumption of renewable power.
Single portal system
In order to ensure ease of doing business, a single portal for carrying out all the activities, including statutory clearances in a time-bound manner, will be set up by the ministry of renewable energy. Connectivity, at the renewable power generation end and manufacturing end of green hydrogen and green ammonia shall be granted on priority. The government will also allow hydrogen and ammonia producers to set up bunkers near ports for storage of green ammonia for export or its use in shipping. The land for the storage for this purpose shall be provided by the respective port authorities at applicable charges.
Green hydrogen for masses
The implementation of the policy will provide clean fuel to the common people of the country and will reduce dependence on fossil fuel, and also reduce crude oil imports. The policy promotes Renewable Energy (RE) generation as it is the basic ingredient in making green hydrogen which will help the country in meeting the international commitments for clean energy.
