MNRE to Incentivize 450,000 MTPA of Green Hydrogen under Tranche II

The Ministry of New and Renewable Energy (MNRE) has issued guidelines for incentive disbursement for up to 450,000 metric tons per annum of green hydrogen production under Component II of the Strategic Interventions for Green Hydrogen Transition (SIGHT) program.

The SIGHT program is a key component of the ₹130.5 billion (~$1.57 billion) National Green Hydrogen Mission, which aims to catalyze the growth of the green hydrogen economy in India from fiscal year 2025-26 through 2029-30. Component I focuses on providing electrolyzer manufacturing incentives, with a financial outlay of ₹44.4 billion (~$541.2 million). Component II aims to support green hydrogen production.

The Solar Energy Corporation of India (SECI) has been tasked with overseeing the competitive bidding process and managing the program’s execution.

The incentive structure is designed to provide support in the critical early years of production. Green hydrogen producers will receive incentives for three years, with caps set at ₹50 (~$0.61)/kg in the first year, ₹40 (~$0.49)/kg in the second, and ₹30 (~$0.37)/kg in the third year. This tiered approach gradually reduces support as the industry matures and becomes more competitive.

In cases where the product is a derivative of green hydrogen, such as green ammonia, incentives will be provided based on the quantity of green hydrogen utilized for producing the derivative. MNRE has set an equivalence factor of 0.1765 kg of green hydrogen per kg of green ammonia.

The program’s auctions will take place in two distinct buckets: 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 the minimum capacity set at 10,000 MT for Bucket I. For Bucket II, the maximum capacity is set at 4,000 MT per annum, and the minimum capacity is capped at 500 MT per annum. Bidders can bid for either bucket or both of them.

Bidders will be ranked based on the average incentive they request over the three years. This is calculated by taking the average of the incentives requested for each year. Capacity will be allocated to bidders in order from the lowest average incentive to the highest.

Eligibility

The eligibility criteria for bidding in the green hydrogen incentive program vary depending on the pathway chosen. For “Technology Agnostic Pathways,” the bidder’s net worth, as of the last date of the previous financial year specified in the tender document, should be at least ₹150 million (~$1.8 million) per thousand MTPA of quoted production capacity of green hydrogen.

For “Biomass-Based Pathways,” the bidder’s net worth should equal or be greater than ₹15 million (~$180,000) per thousand MTPA of quoted production capacity.

The bidder can be a single company or a joint venture of more than one company.

A monitoring committee chaired by the Secretary of MNRE will oversee the program’s implementation.

Recently, the MNRE issued guidelines to implement the program on 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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