Free inter-state wheeling of power allowed in the National Hydrogen Policy

India’s government has allowed free inter-state wheeling of renewable energy used in the production of green hydrogen and ammonia as it seeks to boost usage of the carbon-free fuel and make India an export hub.

Unveiling the first part of the much-awaited National Hydrogen Policy, Power and New and Renewable Energy Minister Raj Kumar Singh said the government is targeting production of 5 million tonnes of green hydrogen by 2030.

Oil refineries to steel plants require hydrogen to produce finished products. This hydrogen currently is generated using fossil fuels such as natural gas or naphtha. While hydrogen per se is carbon-free, the use of fossil fuels results in carbon emissions.

Green hydrogen — also referred to as ‘clean hydrogen’ — is produced by using electricity from renewable energy sources, such as solar or wind power, to split water into two hydrogen atoms and one oxygen atom through a process called electrolysis. The hydrogen thus produced is used in the manufacturing process and oxygen is released into the atmosphere or bottled and sold to hospitals and industries that need it.

A similar process also helps produce green ammonia.

“Hydrogen and ammonia are envisaged to be the future fuels to replace fossil fuels. Production of these fuels by using power from renewable energy, termed as green hydrogen and green ammonia, is one of the major requirements towards environmentally sustainable energy security of the nation,” Singh said.

The government, he said, is taking various measures to facilitate the transition from fossil fuel/fossil fuel-based feedstocks to green hydrogen/ green ammonia.

In the second phase of the policy, the government would mandate the usage of green hydrogen and green ammonia by plants in a phased manner.

Under the policy, companies will have the liberty to set up the capacity to generate electricity from renewable sources anywhere in the country by themselves or through a developer. They could also buy such power from the exchange. This electricity will be allowed to be wheeled, free of cost through open access of the transmission grid, to the plant where hydrogen is to be produced.

The government will also allow the green hydrogen/ammonia manufacturer to bank unconsumed renewable power, for up to 30 days, with the distribution company and take it back when required.

The policy provides for a waiver of inter-state transmission charges for a period of 25 years for manufacturers of green hydrogen and green ammonia for the projects commissioned before June 30, 2025.” India’s total hydrogen demand is expected to touch 11.7 million tonnes by 2029-30.

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