TAG: GS 3: ECONOMY
THE CONTEXT: The Union Ministry of New and Renewable Energy (MNRE) has taken a significant step towards fostering the production and adoption of green hydrogen in India. The recently launched National Green Hydrogen Mission introduces the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, allocating a substantial budget of Rs 17,490 crore.
EXPLANATION:
- This initiative aims to propel domestic electrolyser manufacturing and green hydrogen production by providing guidelines and incentives.
Key Components of SIGHT:
- Under the SIGHT programme, the MNRE adopts Mode-2B, a strategic approach involving the aggregation of demand and competitive bidding for green hydrogen production and supply.
- Tranche I of Mode 2B offers a substantial bidding capacity of 200,000 million tonnes per annum, reflecting the scale and ambition of the mission.
- The execution of the SIGHT scheme falls under the purview of agencies nominated by the Union Ministry of Petroleum and Natural Gas (MoPNG), primarily oil and gas companies.
- These entities, guided by the Centre for High Technology (CHT), will be responsible for soliciting competitive bids for green hydrogen production.
- CHT, in turn, will provide secretarial, managerial, and implementation support.
Industry Adoption and Initiatives:
- Major players in the Indian oil and gas sector are gearing up to embrace green hydrogen.
- Indian Oil Corporation, for instance, declared its intention to convert 50% of its grey hydrogen to green hydrogen by 2030, establishing green hydrogen plants across its refineries.
- Similarly, Hindustan Petroleum Corporation is in the process of constructing a substantial 370 tonnes per annum green hydrogen plant at its Visakhapatnam refinery.
Incentives and Qualification Criteria:
- To incentivize participation in the SIGHT programme, the MNRE has outlined a set of criteria in alignment with the ‘National Green Hydrogen Standard.’
- Bidders meeting these criteria stand eligible for incentives, which include a direct subsidy over three years based on the production and supply rates.
- The rates start at Rs 50 per kilogram in the first year, followed by Rs 40 per kilogram in the second year and Rs 30 per kilogram in the third year.
Allocation Mechanism:
- The scheme employs a competitive allocation mechanism where the bidder quoting the lowest price of supply is allocated its admissible capacity first.
- This process continues sequentially until the total available capacity is exhausted, ensuring efficiency and cost-effectiveness.
Monitoring and Oversight:
- A dedicated scheme monitoring committee, chaired by the Secretary of MoPNG, Secretary of MNRE, Mission Director of the National Green Hydrogen Mission, and other experts, will periodically review the implementation status.
- The committee will also evaluate the performance of capacities awarded or established under the scheme and recommend measures to address challenges.
Global Context and Cautionary Notes:
- Despite the global push towards green hydrogen, a recent report by the World Economic Forum underscores limited on-the-ground traction in India.
- The ‘wait-and-watch’ approach among key players is noted, reflecting cautious optimism.
- Environmental organizations have also raised concerns about potential conflicts related to land-use and water resources associated with green hydrogen production.
Conclusion:
- The SIGHT programme emerges as a pivotal initiative in India’s pursuit of sustainable and green energy solutions.
- As the government strategically invests in incentivizing green hydrogen production, the success of the programme hinges on effective execution, industry collaboration.
- It addresses potential challenges in the evolving landscape of renewable energy.