Cost of green hydrogen in India set to fall by up to 40%: Report
The cost of
green hydrogen in India
, the country that is aiming big in the
renewable energy
space, is expected to fall by up to 40 per cent with the support and incentives the government is providing, according to a report by the Institute for Energy Economics and Financial Analysis.
The levelised cost of
green hydrogen
in India is seen falling towards ₹260-310 per kg ($3-3.75 per kg).
India provides cheap renewable electricity to hydrogen manufacturers, waives Inter-State Transmission Charges for open access, lowers distribution and transmission charges, and lowers the
GST rate
for hydrogen to 5 per cent.
Besides, the report asserts electrolyser manufacturers are projected to achieve a 7-10 per cent reduction in total system costs for the first five years, starting in 2024--₹2,960/kW (USD 36/kW) being the average annual realisable base incentive.
"While the green hydrogen scheme is an important step for India, refinements are needed to promote long-term investment and project viability," says the report.
The report asserted that India's green hydrogen mission has been enthusiastically received by industry. It added, however, that the scheme needs fine-tuning to attract startups, be competitive for global players and create a supply chain and secure demand to ensure the industry's long-term viability.
"If successful, it could help build India's green hydrogen industry with benefits for a range of sectors including agriculture, transport and manufacturing," the Institute for Energy Economics and Financial Analysis report added.
India launched its National Green Hydrogen Mission in January 2023 with an overall outlay of ₹19,744 crores. The country has set an ambitious target of achieving a green hydrogen production capacity of 5 million tonnes by the end of 2030. The programme consists of two distinct financial incentive mechanisms to support domestic electrolyser manufacturing and Green Hydrogen production.
The green hydrogen mission, which aims to establish 5 million tonnes of annual green hydrogen production capacity by 2030, represents a significant step towards realising India's ambitions in the hydrogen economy.
India meets a sizable portion of its energy needs through fossil fuels, and various renewable energy sources, including green hydrogen, are seen as an avenue to reduce dependence on conventional sources of power. Green energy for climate mitigation is not just a focus area for India; it has gained momentum globally.
At COP26 held in 2021, India committed to an ambitious five-part "Panchamrit" pledge. They included reaching 500 GW of non-fossil electricity capacity, generating half of all energy requirements from renewables, and reducing emissions by 1 billion tonnes by 2030. India as a whole also aims to reduce the emissions intensity of GDP by 45 per cent. Finally, India commits to net-zero emissions by 2070.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
SECI invites bids for 2,000 MW solar project with energy storage system
State-owned SECI on Thursday invited bids for setting up a 2,000 MW solar project with co-located energy storage systems in India. In February, the Central Electricity Authority (CEA) issued an advisory on co-locating energy storage systems with solar power projects, a move aimed at enhancing the cost efficiency and stability of the grid. As per the bid document on the SECI website, the selection of a solar power developer (SPD) for the Inter-State Transmission System (ISTS) grid-connected project with 1000 MW/4000 MWh Energy Storage Systems (ESS) will be under a tariff-based competitive bidding (SECI-ISTS-XX) process. Solar Energy Corporation of India Limited (SECI), under the Ministry of New and Renewable Energy (MNRE), is a nodal agency for auctioning renewable energy projects. The last date to submit online bid is July 22, and for offline it is July 24, 2025. The bids will be opened on July 25. "The projects shall be located at the locations chosen by the bidder/SPD at its own discretion and cost, risk and responsibility," the document said. A single project can be set up at multiple locations with different delivery points. The ESS component needs to be co-located with the project. However, in case of a project at multiple locations, the ESS needs to be co-located with at least one of the components, it said. Under the special condition of the bid, "ESS of at least 0.5 MW/2 MWh capacity for 1 MW project capacity shall mandatorily be installed as part of the project. It is clarified that ESS charged using a source other than solar power would not qualify as solar power". As per the National Electricity Plan published by the Central Electricity Authority, in order to integrate the 364 GW of solar and 121 GW of wind capacity by 2031-32, India would require 73.93 GW/411.4 GWh of storage capacity (26.69 GW/175.18 GWh from PSP - Pumped Storage Project - and 47.24 GW/236.22 GWh from BESS). (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
RBI skips 14-day main liquidity operation for third straight fortnight
The Reserve Bank of India has decided not to conduct the 14-day main operation under the liquidity management framework scheduled for Friday, it said in a statement on Thursday. The decision was made following "a review of the current and evolving liquidity conditions" marking the third consecutive fortnight that the central bank has skipped the main 14-day operation. Market participants had expected the RBI to conduct a 14-day variable rate repo auction on Friday on account of the upcoming tax outflows which are seen sucking out rupee funds from the banking system. However, there are inflows of 257 billion rupees expected through government bond buyback, with another 800 billion rupees on account of bond maturities on Friday. "Since we have inflows tomorrow, advance tax needs could be managed, but there could be some tightness around GST (Goods and Service tax) outflows. If government spending does not happen next week, we do not rule out smaller tenor repo," a trader with a private bank said. Advance tax payments are due from June 13 to June 16, while outflows for goods and service taxes are due around June 20. Traders estimate aggregate outflows of around 3 trillion rupees to 3.50 trillion rupees. Earlier in the week the RBI announced that it will stop conducting daily repos, which it had started in the middle of January. "There could be some uptick in overnight rates towards the end of next week, but it may not touch the repo rate," another trader with a private bank said. As of June 11, the banking system liquidity surplus stood at around 2.6 trillion rupees.
Time of India
2 hours ago
- Time of India
Gadkari seeks 5% GST on crude ethanol to push flex-fuel cars, warns against petrol parity
As the Centre and states gear up for a major overhaul of India's Goods and Services Tax ( GST ) framework, Union Road Transport Minister Nitin Gadkari has called for a reduction in the GST rate on crude ethanol—from the current 18 per cent to 5 per cent —in a bid to support the production and adoption of flex-fuel vehicles , according to a report by ToI. At present, ethanol that is used under the Ethanol Blended Petrol (EBP) Programme attracts a concessional GST rate of 5 per cent . However, crude ethanol continues to be taxed at the higher rate of 18 per cent . A source told TNN that Gadkari has urged for parity between the two, cautioning that taxing crude ethanol at such a high rate could discourage people from opting for vehicles that run entirely on ethanol. "Why will people go for these vehicles if the price of crude ethanol is equal to or more than that of petrol?" the source quoted Gadkari as saying. Although over 400 fuel outlets in the country currently offer 100 per cent ethanol, consumer interest remains weak. Gadkari believes this trend can be reversed if a more favourable tax policy is introduced for crude ethanol. Gadkari's appeal comes as the Union government is in the process of re-evaluating the GST structure. Finance Minister Nirmala Sitharaman and a team of officials are reviewing various rationalisation proposals ahead of detailed consultations with states. The larger exercise aims to streamline the GST regime, enhance revenue efficiency, and address classification issues that have emerged since the tax was introduced in 2017. Earlier attempts to bring about change through two separate Groups of Ministers (GoMs) did not yield any actionable consensus. A third GoM is now studying the issue of cesses, particularly the compensation cess, which is set to lapse in March next year. India's GST structure currently features four primary tax slabs: 5 per cent , 12 per cent , 18 per cent , and 28 per cent . While the majority of items fall under the 5 per cent bracket, most of the revenue is generated from the 18 per cent slab. Industry bodies have long been pressing for a simplification of this framework, especially a merger of the 12 per cent and 18 per cent slabs into a single rate of 15–16 per cent . However, such a move may lead to revenue losses and face political opposition from states. Gadkari's proposal to lower GST on crude ethanol aligns with the country's wider energy and transport objectives, including reducing reliance on imported oil and encouraging the use of alternative fuels . It is still uncertain whether this suggestion will be included in the final set of GST reforms currently under consideration.
