The Centre will issue tenders based on the 'demand aggregator' model for green hydrogen. The Ministry of New and Renewable Energy (MNRE) in its latest Cabinet note has proposed that demand for green hydrogen from key sectors such as fertilisers, steel, and refineries would be aggregated and offered as a mega tender.
The Cabinet note has been sent to ministries of petroleum and natural gas, law, department of fertilisers, among others for their comments. The demand aggregation will help in creating substantial volume to facilitate commercial supply of green hydrogen.
MNRE has proposed that SECI can host the bidding process, unless any other agency is not suggested by other ministries. SECI is the nodal agency under MNRE for tendering solar and wind power projects.
Senior officials said the new National Hydrogen Mission which is in works would outline the purchase obligation of green hydrogen for several industries. "This would in turn help in designing the tender as the demand calculations would be available," said an official.
Union Minister for Power, New and Renewable Energy R K Singh last month said, green hydrogen would be included in the 'Renewable Purchase Obligation' (RPO) regime. RPO entails states/power discoms to purchase a certain portion of their energy demand from green energy sources.
MNRE is hoping that with mega tender, the cost of green hydrogen would also come down.
A similar model of bidding was followed for LED disbursement where the cost came down to Rs 60 per bulb from over Rs 300 in two years.
"Several players are interested in green hydrogen now, including oil companies. This would give them an incentive to produce more," said the official.
State-owned thermal power giant NTPC Ltd, Adani Enterprises, new entrant Reliance Industries, ACME Solar, state-owned oil marketing company Indian Oil Ltd have announced their foray into green hydrogen production.
Green hydrogen is produced using renewable energy and electrolysis to split water. This is from grey hydrogen, which is produced from methane and releases greenhouse gases into the atmosphere, and blue hydrogen, which captures those emissions and stores them underground to prevent them causing climate change.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU