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Current Affairs

Green hydrogen policy

Date: 21 February 2022 Tags: Miscellaneous

Issue

The Union government has introduced a new green hydrogen and green ammonia policy recently.

 

Details

The policy will be aiming to boost the domestic production of green hydrogen to 5 million tonnes by 2030 and make India an export hub for the clean fuel.

 

Highlights

  • The policy will provide free power transmission for 25 years for any renewable energy plant set up before July 2025 to supply energy to produce green hydrogen.

  • This means that any green hydrogen producer can construct a renewable energy plant in Rajasthan to supply energy to green hydrogen plant in Assam without having to pay inter-state transmission charges.

  • It will particularly benefit hydrogen and ammonia users such as the oil refining, fertiliser and steel sectors to produce green hydrogen for their own use.

  • Currently, these sectors make use of grey hydrogen or grey ammonia produced using natural gas or naphtha.

 

Incentives offered

  • A single portal will be set up for obtaining all clearances for green hydrogen production as well as bank extra renewable energy produced with Discoms for 30 days and use when required.

  • The government has said that energy plants built to produce green hydrogen/ammonia would be given connectivity to the grid on a priority basis.

  • Power companies can also supply renewable energy to green hydrogen producers but they will be required to do so at a concessional rate.

  • This will be considered under a state’s Renewable Purchase Obligation (RPO), which is compulsory for discoms.

 

Export of green hydrogen and ammonia

  • Port authorities are required to provide land for green hydrogen producers to set up bunkers near ports for storage prior to export.

  • Government has already shortlisted Japan and Germany as key markets for exporting India’s green hydrogen energy.

 

Way ahead

  • A mandate is expected to be introduced to make it compulsory for oil refining, fertiliser and steel sectors to procure green hydrogen and green ammonia for their need.

  • The mandate could start from 15-20 per cent of the sectors’ total requirement.

 

Green hydrogen

  • Green hydrogen is a type of hydrogen gas that is produced through electrolysis of water. The process will make use of renewable energy to achieve this.

  • Electrolysis is an energy intensive process employed for splitting water into hydrogen and oxygen.