Policy

Govt mulls purchase obligation for G-hydrogen, PLI for electrolyzers

M. Ramesh | | Updated on: Sep 08, 2021
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Initially, only the refining and fertilizer sectors would be mandated

The government plans to bring in mandatory ‘green hydrogen purchase obligation’ for the industry and ‘production-linked incentive’ scheme for the manufacture of electrolyzers, the Union Minister for Power and Renewable Energy, R K Singh, said on Wednesday.

Speaking at a webinar on green hydrogen, organized by the Council for Energy, Environment and Water (CEEW), Singh said that the Power Ministry had “drawn up a Cabinet note” for mandating the use of green-hydrogen, according to which if the mandatory purchase was fixed at 10 per cent of hydrogen consumption, then 8,800 MW of electrolyzer capacity would be needed. (Electrolyzers are the machines that split water into hydrogen and oxygen. Green hydrogen is the production of hydrogen with the use of renewable energy or through other non-fossil fuel-based processes.)

At present, there are no electrolyzer manufacturers in India. (Reliance has talked of setting up plants and a US-based company, called Ohmium, has also said it would set up a factory in Bengaluru.) To engender the manufacture of electrolyzers in India, the government proposes to extend the PLI scheme to cover electrolyzers, Singh said.

Initially, only the refining and fertilizer sectors would be mandated. Going forward, more hydrogen users would be brought under purchase obligations and also the percentage would be gradually increased from 10 per cent to about 25 per cent.

Singh said that forcing refiners and fertilizers to use green hydrogen would increase the prices of petroleum products and fertilizers “only slightly”.

Singh said the government intends to push the use of green hydrogen for long-distance, heavy-duty transportation (including shipping), fertilizers and steel.

Accordingly, there would be ‘viability gap funding’ for heavy mobility and purchase tenders for fertilizers produced with green hydrogen.

Speaking earlier, Dr Deepak Yadav of CEEW, said that the potential for green hydrogen in India was estimated to be 7.5 million tons, which would need 200 GW of solar power.

Published on September 08, 2021

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