MNRE Announces Green Hydrogen Incentive Guidelines

08 Jul 2024 CW Team

The SIGHT program is a critical element of India?s ?130.5 billion ($1.57 billion) National Green Hydrogen Mission, which aims to stimulate the growth of the green hydrogen sector from fiscal year 2025-26 to 2029-30. The program includes two components: Component I, which provides incentives for electrolyzer manufacturing with a financial outlay of ?44.4 billion ($541.2 million), and Component II, focusing on supporting green hydrogen production.

The Solar Energy Corporation of India (SECI) will manage the competitive bidding process and oversee the program?s execution. The incentive structure is designed to offer substantial support during the initial years of production, providing up to ?50 ($0.61)/kg in the first year, ?40 ($0.49)/kg in the second, and ?30 (~$0.37)/kg in the third. This tiered approach aims to gradually reduce support as the industry matures and becomes more competitive.

For products derived from green hydrogen, such as green ammonia, incentives will be based on the quantity of green hydrogen used. An equivalence factor of 0.1765 kg of green hydrogen per kg of green ammonia has been set by MNRE.

The program?s auctions will be divided into two categories: Technology Agnostic Pathways (Bucket I), with a capacity of 410,000 MT/annum, and Biomass-Based Pathways (Bucket II) offering 40,000 MT/annum. The maximum capacity allotted to a single bidder is capped at 90,000 MT per annum, with a minimum capacity set at 10,000 MT for Bucket I. For Bucket II, the maximum capacity is 4,000 MT per annum, and the minimum is 500 MT per annum. Bidders can participate in either or both categories.

Bidders will be ranked based on the average incentive requested over the three years, calculated by taking the average of the incentives requested for each year. Capacity will be allocated from the lowest to the highest average incentive requested.

The eligibility criteria for bidding vary depending on the pathway chosen. For ?Technology Agnostic Pathways,? bidders must have a net worth of at least ?150 million ($1.8 million) per thousand MTPA of quoted production capacity of green hydrogen. For ?Biomass-Based Pathways,? the requirement is ?15 million ($180,000) per thousand MTPA of quoted production capacity. Bidders can be single companies or joint ventures.

A monitoring committee chaired by the Secretary of MNRE will oversee the program?s implementation. Additionally, MNRE has issued guidelines for funding testing facilities, infrastructure, and institutional support to develop standards and a regulatory framework. The program will be operational until 2026, with a total outlay of ?2 billion (~$23.95 million).

The Ministry of New and Renewable Energy (MNRE) has announced guidelines for disbursing incentives aimed at boosting green hydrogen production to 450,000 metric tons per annum under Component II of the Strategic Interventions for Green Hydrogen Transition (SIGHT) program. The SIGHT program is a critical element of India?s ?130.5 billion ($1.57 billion) National Green Hydrogen Mission, which aims to stimulate the growth of the green hydrogen sector from fiscal year 2025-26 to 2029-30. The program includes two components: Component I, which provides incentives for electrolyzer manufacturing with a financial outlay of ?44.4 billion ($541.2 million), and Component II, focusing on supporting green hydrogen production. The Solar Energy Corporation of India (SECI) will manage the competitive bidding process and oversee the program?s execution. The incentive structure is designed to offer substantial support during the initial years of production, providing up to ?50 ($0.61)/kg in the first year, ?40 ($0.49)/kg in the second, and ?30 (~$0.37)/kg in the third. This tiered approach aims to gradually reduce support as the industry matures and becomes more competitive. For products derived from green hydrogen, such as green ammonia, incentives will be based on the quantity of green hydrogen used. An equivalence factor of 0.1765 kg of green hydrogen per kg of green ammonia has been set by MNRE. The program?s auctions will be divided into two categories: Technology Agnostic Pathways (Bucket I), with a capacity of 410,000 MT/annum, and Biomass-Based Pathways (Bucket II) offering 40,000 MT/annum. The maximum capacity allotted to a single bidder is capped at 90,000 MT per annum, with a minimum capacity set at 10,000 MT for Bucket I. For Bucket II, the maximum capacity is 4,000 MT per annum, and the minimum is 500 MT per annum. Bidders can participate in either or both categories. Bidders will be ranked based on the average incentive requested over the three years, calculated by taking the average of the incentives requested for each year. Capacity will be allocated from the lowest to the highest average incentive requested. The eligibility criteria for bidding vary depending on the pathway chosen. For ?Technology Agnostic Pathways,? bidders must have a net worth of at least ?150 million ($1.8 million) per thousand MTPA of quoted production capacity of green hydrogen. For ?Biomass-Based Pathways,? the requirement is ?15 million ($180,000) per thousand MTPA of quoted production capacity. Bidders can be single companies or joint ventures. A monitoring committee chaired by the Secretary of MNRE will oversee the program?s implementation. Additionally, MNRE has issued guidelines for funding testing facilities, infrastructure, and institutional support to develop standards and a regulatory framework. The program will be operational until 2026, with a total outlay of ?2 billion (~$23.95 million).

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