India opens the country’s first green hydrogen subsidy auction

 Government plans to support a maximum 450,000 tonnes of annual production capacity, but it has not yet published a definition of what counts as 'green' H2.

The auction is capped at a total of 450,000 tonnes-a-year of capacity. Bidders will only able to receive a maximum of 50 rupees ($0.60) per kilogram in the first year of a green hydrogen plant’s operation, shrinking to 40 rupees/kg in the second and 30 rupees/kg in the third and final year of the subsidy.

This auction — being held by the government entity Solar Energy Corporation of India (SECI) — is also split into two “buckets”, one for biomass-based green hydrogen projects and the other for facilities using any technology to power electrolysis. The biomass bucket is has 40,000 tonnes per year of capacity available, while the technology-agnostic bucket is capped at 410,000 tonnes of annual production.

Each bucket of the auction will select bidders based on “least average incentive” until capacity is exhausted. And if there is any remaining capacity per bucket, it can be awarded to bidders who applied for the other bucket.

However, while previous documents outlining the conditions of the auction indicated that a national green hydrogen standard would be published alongside the opening of the tender, this has not yet been published by the SECI or Ministry of New and Renewable Energy websites.

News agency Reuters suggested in April that the government would seek to limit carbon intensity of green hydrogen to 1kgCO2/kgH2 and an entirely renewable energy source powering electrolysis.

Hydrogen Insight has reached out to the MNRE and SECI for more information on the standard.

However, the biomass-based projects will not comply with the EU’s delegated acts defining renewable H2 — which only covers renewable fuels of non-biological origin — potentially locking that bucket into domestic supply.

The SECI can also notify bidders that it will only award part of the capacity asked for, in which case companies have a seven-day refusal period before it is offered to another company, with its own seven-day right of refusal.

No date has been set for when the winning bidders will be announced.

Source:hydrogeninsight.com

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