In a significant move towards fostering green energy, the Ministry of New and Renewable Energy (MNRE) has announced a strategic framework aimed at encouraging the yearly production of 200,000 metric tonnes (MT) of green hydrogen. This initiative, subject to potential capacity adjustments in subsequent phases, will be supported by a series of incentives extending over a three-year period.

The incentives, designed to facilitate the cost-effective delivery of green hydrogen to refineries through a competitive selection process, fall under Mode 2B of the Strategic Interventions for Green Hydrogen Transition (SIGHT) initiative. With an expansive budget of Rs 130.5 billion allocated across all modes, the program outlines a tiered incentive structure, starting at Rs 50 per kg in the initial year, followed by Rs 40 per kg in the second year, and further reduced to Rs 30 per kg in the third year. Notably, incentives under the SIGHT program cannot simultaneously qualify under two distinct modes, and the assigned capacity remains fixed throughout the purchase agreement’s duration.

To be eligible for incentives, bidders must adhere to the national green hydrogen standard established by the MNRE for the production and distribution of green hydrogen. The Ministry of Petroleum and Natural Gas (MoPNG) retains the authority to set minimum capacity thresholds and caps on maximum capacity for individual bidders. Unallocated capacity from the current tranche may be transferred to subsequent tranches. Oil and gas companies, selected by the MoPNG and the Centre for High Technology (CHT), will serve as implementing agencies, executing various tasks delegated by the MNRE and the MoPNG.

The responsibilities of oil and gas companies include consolidating demand, soliciting bids for production and supply, evaluating applications, and issuing acknowledgments and awards. The CHT will review incentive claims, authenticate documentation, and submit quarterly progress reports to the MNRE via MoPNG. Both oil and gas companies and the CHT are entitled to an annual administrative charge equivalent to 0.5 percent of the disbursed incentive amount.

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Bidders, whether single companies, joint ventures, or consortia, must possess a net worth of at least Rs 150 million per 1,000 MT per annum of the stated production and supply capacity as of the preceding financial year’s conclusion. Oversight of the scheme will be conducted by a committee led by the Secretary of the MoPNG, alongside the Mission Director of the National Green Hydrogen Mission and additional experts, ensuring regular assessment of progress and performance in green hydrogen production capacities.

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