Beaten down by unviable tariffs, the moribund wind industry has now discovered a succor in green hydrogen. Almost all the players are looking to green hydrogen for deliverance. 

The Centre had brought in the ‘tariff-based competitive bidding’ in 2017, under which the company offering the lowest tariff would bag long-term power purchase contracts. This has resulted in hammering down tariffs to unviable levels. The bidding mechanism replaced the erstwhile ‘feed-in tariff’ system, under which the respective state electricity regulatory commission determined a fixed tariff. 

Tariffs fell to as low as ₹2.44 a kWhr in some rounds of auctions, and many companies who were awarded contracts, are unwilling to go ahead with projects as there no cushion to take on the rising costs. 

Of the 16,300 MW of capacity auctioned since late 2016, about 12,740 MW have been awarded. However, only 3,196 MW of projects have come up with many being surrendered, according to the Indian Wind Turbine Manufacturers’ Association. 

Now, wind energy companies have been looking for other avenues (other than long-term power purchase agreements) to sell their electricity. One option was to sell directly to ‘commercial and industrial’ customers; other to the energy exchange, IEX.  

Another option which is tantalizingly dangling before them is green hydrogen. 

Many companies that BusinessLine spoke to at the Windergy 2022 conference-cum-expo held in New Delhi between April 27-29, said, they are keen on green hydrogen option.

Bright prospects

The green hydrogen could, further, be used to produce green ammonia for which there is a good ovreseas demand . The domestic demand would also emerge after the government brings in the proposed ‘green hydrogen purchase obligation’ on refinery and fertilizer companies. 

While energy companies like O2 Power, having 2 GW portfolio, are interested in getting into green hydrogen production, the larger, well-funded companies such as ReNew and Greenko have announced tie-ups with electrolyzer manufacturers. ReNew Power had announced joint venture with L&T and IOC (L&T for electrolyser supply, ReNew for green electricity and IOC as the consumer of green hydrogen). The company had also tied up with John Cockerill of Belgium for setting up two electrolyzer giga factories in India.  

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