New Delhi:
Renewable energy companies welcomed the national hydrogen policy on Thursday, but sought clarity about the costs of intra-state wheeling of electricity. Manoj K Upadhyay, founder and chairman of ACME Group, said the policy is the first concrete step towards creating a favorable regulatory and favorable environment for India’s green hydrogen and ammonia sector.
The government has sought to address some of the industry’s key demands for open access, grid banking and faster approvals for green hydrogen and ammonia projects,” he said, welcoming the provisions to close bunkers near ports. build for export of green ammonia. .
For the future, it will be important to build on the first phase of the policy and then for the government to come up with policy measures for initial demand creation through mandatory purchasing obligations for green hydrogen and ammonia and at the same time an equivalent of PLI scheme for green ammonia to make India globally competitive, he added.
Mayank Bansal, Chief Commercial Officer of ReNew Power, said the policy is “a very good step in the right direction as India aims to become a net-zero economy by 2070 and will increase momentum towards that critical goal.” “Currently, the production of green hydrogen is a costly affair and recognizing this, the government has rightly waived the interstate transportation taxes for a period of 25 years, which will help to reduce the cost of green hydrogen.
“The government has also authorized power banking for 30 days, which will help improve the use of capital-intensive electrolyser assets,” he said.
However, the company sought more clarity about the application of the cross-subsidy surcharge and additional cross-subsidy surcharge because the policy allows production at different locations by different parties.
“In addition, the decision to include biomass as a fuel for green hydrogen generation is a step in the right direction,” said Bansal.
He said it is a much-needed initiative and state governments should now follow suit and extend benefits such as exemptions from intra-state transmission and electricity tariffs.
“This will help make India a green hydrogen hub,” Bansal said.
Anish De, National Head – Energy, Natural Resources and Chemicals, KPMG in India, said the transmission fee exemption until 2025 is open-ended in terms of capacity.
“Double-edged sword – if a lot of capacity comes in, it will be policy success, but at the expense of other transmission users and tariff payers. There is already a lot of noise about high transmission costs,” he said.
He said not all capacity will be in the interstate area, he said, how the state regulators play should be viewed. “They are under no legal obligation to comply with any charges.” “The implications of cross-subsidy fees should be understood especially for third-party developers. The policy speaks in the same breath about proprietary or third-party development, but the law sees it differently,” he added.
Anvesha Thakker, Partner and Lead, Renewable Energy, KPMG in India, said green hydrogen is one of the most crucial clean energy sources to decarbonise India’s energy needs and improve energy security in a sustainable way.
“In the recently announced Green Hydrogen Policy, the government has addressed several factors to reduce costs and facilitate the implementation of green hydrogen/green ammonia projects,” he said.
“However, the policy should respond to the expectations of hydrogen producers by clarifying demand-side measures, such as obligations for the purchase of hydrogen. Similarly, there is still no clarity on measures to facilitate the localization of the production of electrolyzers. there is no mention of derivatives of green hydrogen other than green ammonia, such as methanol.”