India will launch the first part of the much-awaited National Hydrogen Policy on Thursday, said power and new and renewable energy minister Raj Kumar Singh on Wednesday.
The minister told a conference on 'India's Leadership in Energy Transition' that the first half of the policy would include components that the government would execute right away, while the second portion is now with the Expenditure Finance Committee.
According to Singh, the government will offer businesses the "flexibility to set up renewable energy capacity anywhere by themselves or through a developer" under the proposal. "We will give them unrestricted access," Singh said, adding that excess green hydrogen produced by any company will be able to be banked or stored for up to 30 days if the capacity is built before 2025.
Green hydrogen is made by splitting water into hydrogen and oxygen in an electrolyzer fueled by electricity generated from renewable energy sources like wind and sun. Both fuel cells and internal combustion engines can utilise hydrogen. It's also being used in industries including chemicals, iron, steel, transportation, heating, and power.
This comes when the clean energy, climate protection and energy transition have become the overwhelming focus in India's administration arrangements, with Prime Minister Narendra Modi submitting at COP26 culmination, Glasgow last year to become carbon neutral by 2070.
Government would also mandate usage of green hydrogen and green ammonia under the upcoming policy in a phased manner, he said. This mandate would however require Cabinet approval, he added.
Indian firms, including Reliance Industries Ltd, Adani Group, Greenko and Acme Solar Holdings Ltd, have announced their green hydrogen plans. Around 54% or 3.6 mmt of India’s annual hydrogen consumption of 6.7 mmt is utilized in petroleum refining and the rest in fertilizer production. This is, however, ‘grey’ hydrogen produced from fossil fuels such as natural gas or naphtha.
On Wednesday, the minister also said that the government would extend the ongoing Renewable Purchase Obligation (RPO).
"We are going to come up with rules. We have a draft under consideration, in which we are providing that the RPO obligation laid down by the Central Government shall be followed," Singh said.
He added that the government is considering to increase penalties for non-compliance of RPOs, through amendment to the Electricity Act. Further, the new rules would include the target of 500 GW of renewable energy and storage would also be brought under the ambit of the RPO.