An agreement to purchase green hydrogen may last 15 years
POWER & RENEWABLE ENERGY

An agreement to purchase green hydrogen may last 15 years

In order to enable cost recovery, the government is considering requiring longer green hydrogen and green ammonia purchase agreements of at least 15 years.. “The green hydrogen and green ammonia projects are likely to involve higher upfront capital investment. Hence, the purchase agreement period should not be less than 15 years. There would also be provisions for further extension of the contract period on terms and conditions mutually agreed between the parties,” a senior government official said. An electronic technical and price bids-based auction for the purchase of green hydrogen and green ammonia is proposed for purchases of over 4,000 metric tonnes per year (mtpa) of green hydrogen and 20,000 mtpa of green ammonia, in accordance with bidding guidelines being developed by the renewable energy ministry.

For interested procures, the government is also likely to allow the option of e-reverse bidding. The regulations also call for the establishment of intermediaries between green hydrogen and ammonia procurers and suppliers who can aggregate demand from multiple consumers. The option of traders pooling tariffs is also being considered.

“Procurers can avoid the risk of getting locked into higher tariffs as there are improvements in technologoy. The center is mulling providing options that intermediaries can consider to pool tariff for green hydrogen and ammonia. The pool tariff will be a weigheted average of tariff arrived through each competitive bid,” the official said.

The power ministry is recommending the same thing for renewable energy projects.

“Long term contract is a necessary condition for this market to take off in the absence of which these capital intensive projects will not be viable. We would prefer it if is closer to 25 years,” said ACME Group CEO Rajat Sekasria.

According to him, the provision allowing pooled tariffs lowers the risk for both producers and buyers. “That’s a very mature decision, “ he said.

In addition to announcing plans to produce 5 million tonnes of green hydrogen by 2030, India also unveiled a policy on February 17 that will allow businesses to use renewable energy sources to produce hydrogen or ammonia without being charged transmission fees for 25 years. The goal is to require fertilizer plants, oil refineries, and city gas distribution networks to use green hydrogen.

The majority of domestic oil refiners have made significant commitments to the production of green hydrogen, and some of them have already started the process of establishing modest facilities based on captive renewable power plants.

See also:
ACME Cleantech, Karnataka govt inks MoU for green hydrogen plant
ACME Solar develops 300 MW solar project for MSEDCL in Rajasthan


In order to enable cost recovery, the government is considering requiring longer green hydrogen and green ammonia purchase agreements of at least 15 years.. “The green hydrogen and green ammonia projects are likely to involve higher upfront capital investment. Hence, the purchase agreement period should not be less than 15 years. There would also be provisions for further extension of the contract period on terms and conditions mutually agreed between the parties,” a senior government official said. An electronic technical and price bids-based auction for the purchase of green hydrogen and green ammonia is proposed for purchases of over 4,000 metric tonnes per year (mtpa) of green hydrogen and 20,000 mtpa of green ammonia, in accordance with bidding guidelines being developed by the renewable energy ministry. For interested procures, the government is also likely to allow the option of e-reverse bidding. The regulations also call for the establishment of intermediaries between green hydrogen and ammonia procurers and suppliers who can aggregate demand from multiple consumers. The option of traders pooling tariffs is also being considered. “Procurers can avoid the risk of getting locked into higher tariffs as there are improvements in technologoy. The center is mulling providing options that intermediaries can consider to pool tariff for green hydrogen and ammonia. The pool tariff will be a weigheted average of tariff arrived through each competitive bid,” the official said. The power ministry is recommending the same thing for renewable energy projects. “Long term contract is a necessary condition for this market to take off in the absence of which these capital intensive projects will not be viable. We would prefer it if is closer to 25 years,” said ACME Group CEO Rajat Sekasria. According to him, the provision allowing pooled tariffs lowers the risk for both producers and buyers. “That’s a very mature decision, “ he said. In addition to announcing plans to produce 5 million tonnes of green hydrogen by 2030, India also unveiled a policy on February 17 that will allow businesses to use renewable energy sources to produce hydrogen or ammonia without being charged transmission fees for 25 years. The goal is to require fertilizer plants, oil refineries, and city gas distribution networks to use green hydrogen. The majority of domestic oil refiners have made significant commitments to the production of green hydrogen, and some of them have already started the process of establishing modest facilities based on captive renewable power plants. See also: ACME Cleantech, Karnataka govt inks MoU for green hydrogen plant ACME Solar develops 300 MW solar project for MSEDCL in Rajasthan

Next Story
Real Estate

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Next Story
Real Estate

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Next Story
Infrastructure Urban

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement