Government Optimises Energy Mix To Reduce Green Hydrogen Costs

10 Feb 2026 CW Team

Under an incentive scheme for electrolyser manufacturing, 15 companies were awarded a combined manufacturing capacity of 3,000 megawatt (MW) per annum and incentives totalling Rs 44.4 bn. Under the production incentive scheme, 18 companies secured cumulative capacity of 0.862 mn tonnes (t) per annum, while two companies were selected under a procurement scheme for refineries with total capacity of 20,000 tonnes per annum. Prices were discovered by the Solar Energy Corporation of India for supply of 0.724 mn tonnes (t) per annum of green ammonia to 13 fertiliser units.

Projects that commission green hydrogen or green ammonia plants on or before 31 December 2030 and that use renewable energy have been granted exemption from Inter State Transmission System charges for a period of 25 years from commissioning. Duty benefits under section 26 of the Special Economic Zone Act, 2005 have been allowed for installation and operation and maintenance of renewable energy equipment for captive consumption. These measures aim to reduce input costs and create predictable investment signals.

Complementary measures include standard bidding guidelines for tariff based procurement, exemptions from approved lists for modules and turbine models inside special economic zones and export oriented units, and permission for foreign direct investment up to 100 per cent. Solar parks and ultra mega solar projects, funding under the Green Energy Corridor and a transmission plan to 2030 are expected to support energy mix optimisation. The information was submitted in a written reply to the Rajya Sabha by the Union Minister of State for New and Renewable Energy.

The Government of India is implementing the National Green Hydrogen Mission to make the country a global hub for production, use and export of green hydrogen and its derivatives. The programme targets a production capacity of five mn metric tonnes (t) per annum by 2030 and seeks to lower production costs through coordinated incentives and infrastructure support. Implementation emphasises rapid expansion of low cost renewable energy and integration of long term offtake arrangements to provide stable demand and industrial decarbonisation. Under an incentive scheme for electrolyser manufacturing, 15 companies were awarded a combined manufacturing capacity of 3,000 megawatt (MW) per annum and incentives totalling Rs 44.4 bn. Under the production incentive scheme, 18 companies secured cumulative capacity of 0.862 mn tonnes (t) per annum, while two companies were selected under a procurement scheme for refineries with total capacity of 20,000 tonnes per annum. Prices were discovered by the Solar Energy Corporation of India for supply of 0.724 mn tonnes (t) per annum of green ammonia to 13 fertiliser units. Projects that commission green hydrogen or green ammonia plants on or before 31 December 2030 and that use renewable energy have been granted exemption from Inter State Transmission System charges for a period of 25 years from commissioning. Duty benefits under section 26 of the Special Economic Zone Act, 2005 have been allowed for installation and operation and maintenance of renewable energy equipment for captive consumption. These measures aim to reduce input costs and create predictable investment signals. Complementary measures include standard bidding guidelines for tariff based procurement, exemptions from approved lists for modules and turbine models inside special economic zones and export oriented units, and permission for foreign direct investment up to 100 per cent. Solar parks and ultra mega solar projects, funding under the Green Energy Corridor and a transmission plan to 2030 are expected to support energy mix optimisation. The information was submitted in a written reply to the Rajya Sabha by the Union Minister of State for New and Renewable Energy.

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