India's Green Hydrogen Push: Incentives for Renewable Energy Projects in Special Economic Zones
Key Ideas
  • Renewable energy projects within Special Economic Zones supplying power exclusively to green hydrogen projects exempt from Approved List of Models & Manufacturers for solar PV modules until December 31, 2030.
  • Ministry of New and Renewable Energy allocates funds for incentivizing electrolyzer manufacturing, aiming to reduce green hydrogen production costs.
  • National Green Hydrogen Mission sets ambitious targets for green hydrogen production capacity and investment by 2030, with oil and gas companies playing a key role.
  • Incentives and programs such as SIGHT aim to promote the production of green hydrogen at competitive costs, ensuring flexibility for projects initiated before April 10, 2021.
The Ministry of New and Renewable Energy in India has introduced new incentives to promote green hydrogen production through renewable energy projects located in Special Economic Zones (SEZ). Projects supplying power exclusively to green hydrogen will be exempt from the Approved List of Models & Manufacturers for solar PV modules until December 31, 2030. Green hydrogen, defined as hydrogen produced using renewable energy sources like electrolysis or biomass conversion, is a focal point of the National Green Hydrogen Mission (NGHM). The government has allocated significant funds towards this initiative, including ₹44.4 billion (~$535.6 million) to incentivize electrolyzer manufacturing. The NHGM aims to develop a green hydrogen production capacity of 5 million tons per year, requiring substantial investments by 2030. Additionally, the ministry has outlined an implementation framework to encourage the annual production of 200,000 MT of green hydrogen, with oil and gas companies designated as implementing agencies. The Strategic Interventions for Green Hydrogen Transition (SIGHT) program under NHGM focuses on providing incentives for green hydrogen production at competitive costs, with a total outlay of ₹130.5 billion (~$1.57 billion). Importantly, the ALMM exemption for renewable projects supplying power to green hydrogen projects is subject to projects with bid submission deadlines after April 10, 2021. This flexibility allows ongoing projects to benefit from the incentives and exemptions, further enhancing the growth of green hydrogen production in India.
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