Government sources told Reuters by May 2023 India will invite bids for subsidies for setting up green-hydrogen manufacturing and utilisation hubs, fertiliser and steel plants based on the fuel, and factories for making electrolysers. Last week, the Centre approved the National Green Hydrogen Mission with a green hydrogen production capacity target of at least five million metric tonnes (mmt) and an associated renewable energy capacity addition of about 125 gigawatts (GW) by 2030.
The Mission plans to export green hydrogen and simultaneously reduce fossil fuel imports of over ₹1 lakh crore. Over ₹8 lakh crore in investments is expected for infrastructure development. The first disbursement for the Mission will be ₹19,744 crore, including an outlay of ₹17,490 crore under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.
The programme’s incentive is to target the domestic manufacturing of electrolysers along with the production of green hydrogen. Electrolysis powered by renewable electricity is used to produce green hydrogen. Towards this, 60-100 GW of electrolyser capacity is planned. Reuters reported that India plans to reduce cost to reduce the production cost of green hydrogen by a fifth over the next five years, in part by increasing the scale of the industry.
India launches first-ever sovereign green bonds auction, big coal to benefit indirectly?
The Reserve Bank of India said it will auction 160 billion rupees ($1.93 billion) worth of green bonds in two tranches, to raise funds for clean projects. On Jan 25 and Feb 9, the central bank will auction 5-year and 10-year green bonds worth 40 billion rupees each. The proceeds will be used to fund solar power projects, followed by wind and small hydro projects and other “public sector projects which help inreducing the carbon intensity of the economy,” the RBI said.
Power minister said the government has worked out the PLI (production linked incentive) scheme for the domestic manufacturing of electrolysers that will cover manufacture of 15 gigawatts (GW) capacity, which is expected to reach “almost in the region of 60 GW by 2030”, to become the world’s largest electrolyser manufacturing capacity.
The government-appointed evaluation agency CICERO, which provides opinion on green financing frameworks, highlighted the pitfalls, stating that India’s green bonds could indirectly back big coal firms. It said that subsidies to support the expansion of renewable energy such as wind and solar power may be given to large companies that are heavily involved in coal-based power generation.
122 GW vs 175 GW by 2022: India misses renewable energy target by 30%
India missed its renewable energy goal by more than 30% in 2022. Bridge To India estimated that the country installed a cumulative renewable capacity (excluding large hydro) of 122 GW by December: 53 GW short of its 175 GW target. Reuters cited government officials blaming COVID constraints for the shortfall of renewable energy to its power grid by 2022, short of its target of 175 GW.
The annual average solar and wind capacity addition over the last five years remained at 9 GW compared to the 19 GW target. Annual wind capacity addition was at the abysmal low of 2 GW per year.
India’s next “extremely ambitious” target is to add 36 GW of combined solar and won capacity annually up to 2030. According to experts the constraints include: lack of domestically manufactured supply, 40% basic customs duty (BCD) on solar imports, and ALMM (Approved List of Models and Manufacturers) policy.
The current year is expected to signal a turnaround with early estimates suggesting record capacity addition of 18.8GW, 50% up, with a split of 90:10 between solar and wind.
83% of Indian states miss renewable purchase obligation target in 2022
According to the Bridge to India analysis, 25 of the 30 states had adopted Renewable Purchase Obligation targets lower than the central government target of 21.2% for FY 2022. Targets were not enforced by state regulators because of the poor financial condition of DISCOMs, intermittency concerns, lack of renewable resources, and/ or land at a reasonable cost, according to the report. Uttar Pradesh, Haryana, and West Bengal are the main laggards. Only five states including Himachal Pradesh, Chhattisgarh, Punjab, Madhya Pradesh, and Haryana have adopted the enhanced RPO target of 43.3% for FY 2030.
The Bridge to India analysts said timely implementation of the recent announcement of a 500 GW transmission plan by CEA is key.. Centre needs to activate demand by undertaking efforts to boost grid flexibility, investment in storage infrastructure, and demand management.