Incentive For Green Hydrogen Production in India

Government of India Green Hydrogen Incentive

In this post, Incentive for Green Hydrogen Production for qualified bidders are given. The government allocation Rs. 13,050 crore for green hydrogen production mode 1 incentive scheme.

Objective of scheme

• To maximize production of green hydrogen in India
• Cost competitiveness of green hydrogen and fossil fuel alternative
• Encourage large scale utilization of green hydrogen

Implementing Agency

• Ministry of new and renewable energy through solar energy cooperation of India limited (SECI) is as the implementing agency. 
• The SECI will have right to carry out physical inspection of an applicant’s production plants

Green Hydrogen

• The bidder must ensure green hydrogen production in accordance with the criteria laid down in the National Green Hydrogen Standard. 
• If the end product is derivative of green hydrogen such as green ammonia, incentive would be given as per weight of green hydrogen utilized to produce the given amount of derivative.
• The following equivalence factor would be applicable for green ammonia

Derivative	Equivalent amount of green hydrogen
Green Ammonia	0.1765 kg Green Hydrogen per kg of Green Ammonia

 

Incentive ( Green Hydrogen Production )

• Under the scheme, a direct incentive of Rs/kg of green hydrogen production will be provided for the 3 years from the date of commencement of green hydrogen production
• Beneficiaries under the scheme will be selected through competitive selection process

Incentive	Rs
First year	Rs 50 per kg
Second year	Rs 40 per kg
Third year	Rs 30 per kg

 

Payment for incentive

Incentive payout in given year = ( Incentive quoted for that year in Rs per kg ) × ( Allocated capacity or Actual production in the year in kg, which is lower )

 

Bid Process

MNRE through SECI invites bids, the bidders will be required to quote the following

• Annual production capacity of green hydrogen / its derivatives for incentive
• The capacity should be constant over first three years from start of production
• Incentive demanded in Rs/kg for first three year of production with limit of Rs 50/kg, Rs 40/kg, Rs 30/kg for 1st, 2nd and 3rd year of production respectively.

Selection Process

• Qualified bidder will be allocated capacities in the order of the least average incentive demanded in Rs/kg, taken as simple average of three years. In case of two or more bidders quote the exact same least incentive demanded, such tied bid, bidders who has quoted higher quantum of bid capacity and if bidder capacities are equal, then bidder would be given same ranking and allotted equal capacities.

Illustration

• If a bidder quotes Rs. 42/kg for 1st year, Rs. 40/kg for 2nd year and Rs. 30 for 3rd year,
• Average incentive = ( Rs 42 + Rs 40 + Rs 30 ) / 3

                                     =  Rs 37.33/kg

• If the least average incentive for 1st bidder is Rs 37.33/kg and that of 2nd bidder is Rs 34/kg, then bidder 2 will be first allocated the quoted bid capacity which should be higher than 10,000 MT and lower than 90,000 MT.
• If the two bidder quoted same least average incentive (Rs. 38/kg) and same bid capacities ( 40,000 MT ), then they will allocated equal capacities depending upon unallocated capacity, up to maximum 50,000 MT each.

https://mnre.gov.in/

Separate Buckets for Different Pathways

• Capacities available for bidding during Trench 1, is as under

	Technology Agnostic Pathways (Bucket 1)	Biomass Based Pathways (Bucket 2)
Total capacity available for bidding	410,000 MT per annum of Green hydrogen	40,000 MT per annum of Green hydrogen

 

Eligibility for Bidding

• Bidder under Technology Agnostic Pathways specified as on the previous financial year, as per tender document should be equal to greater than Rs 15 crore per thousand MT per annum of quoted production capacity of green hydrogen.
• Bidder under Biomass Based Pathway specified as on the previous financial year, as per tender document should be equal to greater than Rs 1.5 crore per thousand MT per annum of quoted production capacity of green hydrogen.
• For details: Green Hydrogen Incentive in INDIA pdf

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