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Green Hydrogen / Green Ammonia Policy
The government has announced plans to produce five million tonnes of green hydrogen by 2030 and unveiled a policy that will enable manufacturers to source renewable energy to produce hydrogen or ammonia without paying transmission charges for 25 years.
This will boost the usage of the truly carbon-free fuel and make India an export hub.
The policy allows firms to set up renewable power capacity anywhere in the country.
They can also buy green power from exchanges.
In both cases, inter-state transmission will be free.
The government will allow the green hydrogen manufacturers to bank unconsumed renewable power, for up to 30 days, with distribution companies and take it back when required.
Reliance Industries (RIL), Larsen & Toubro, JSW Steel, Jindal Steel, NTPC, BPCL and Indian Oil Corp, among others, have announced plans to set up green hydrogen units.
The renewable energy industry is expected to get a lift from the policy as its cost will fall for those producing green hydrogen or ammonia, thereby increasing demand.
Despite the incentives, industry insiders has said green hydrogen would cost substantially more than that made from natural gas and the price would need to fall further for it to be more widely adopted.
The cost is expected to be Rs.350-400/kg against an average Rs.140-180/kg from natural gas reformation.
Waiver of inter-state transmission charges will bring down the cost of power, a key element in the production of green hydrogen.
The provision for banking of unconsumed renewable power would also be very helpful.
These steps will not make commercially viable. The final cost of renewable power for consumers must fall significantly for viable green hydrogen.
The policy allows priority transmission, banking with distribution companies, quick open access, and single-window clearance for renewable energy used for Green Ammonia
Producers will be given land for storage of such green hydrogen at ports.
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