Rajasthan Government Approves Green Hydrogen Policy, 2023

Representational image. Credit: Canva

Rajasthan Chief Minister Ashok Gehlot has officially unveiled the ‘Rajasthan Green Hydrogen Policy-2023.’ The policy, designed to encourage investments and facilitate the exploration of clean energy sources within the state, has now received formal approval and is set to be enacted soon by the Energy Department.


Key Highlights


Subsidies for Green Energy Producers: Under the new policy, companies engaged in green energy production within Rajasthan will be eligible for various subsidies, fostering a favorable environment for clean energy initiatives. This move is expected to stimulate economic growth and create employment opportunities in the state.


Renewable Energy Abundance: Rajasthan boasts abundant sources of renewable energy, making it an ideal location for green hydrogen production. The state government is keen to leverage these resources to meet its clean energy production targets and contribute to a sustainable future.

Incentives for Investors: To attract investors, the policy offers a range of incentives. Notable provisions include a 50 percent exemption in transmission and distribution charges for 10 years for companies establishing 500 KTPA (kilo-tonnes per annum) renewable energy plants on the state’s transmission system. Additionally, complete exemptions in additional and cross-subsidy surcharges on purchasing renewable energy from third parties are granted for a decade.

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Research Center Grants: Investors prioritizing the establishment of research centres for green hydrogen production from treated or brackish water can receive a grant of up to 30 percent (maximum ₹5 crore).

Facilities and Benefits: The policy encompasses various discounts, water availability assurances, and banking facilities under the Rajasthan Investment Promotion Scheme-2022 (RIPS-2022). Notably, there are no restrictions on the capacity of captive power plants, and the ban on power withdrawal during peak hours has been lifted under the new policy.

Reimbursements and Waivers: Power plants in the green hydrogen sector will enjoy 100 percent reimbursement or waiver of wheeling and transmission charges. Banking charges for these power plants will also be reimbursed or waived for a duration of seven to ten years.

Sunrise Sector Recognition: The ‘Rajasthan Green Hydrogen Policy-2023 places the green hydrogen sector within the thrust sector category of the Rajasthan Investment Promotion Scheme-2022 and offers the benefits of the Manufacturing Standard Package, enhancing its attractiveness to investors.

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Public Input and Target

The Energy Department ensured public participation by soliciting suggestions from stakeholders during the drafting process. Valuable recommendations have been incorporated into the policy. The state government has set an ambitious target of achieving 2000 KTPA energy production by 2030, with projects divided into four categories:

  • Extraction of renewable energy through the power grid network.
  • Production of renewable energy and hydrogen at a single location (700 KTPA).
  • Round-the-clock generation of renewable energy through RTC power (800 KTPA).
  • Residence of renewable energy through the RVPN network (500 KTPA).

Green hydrogen, an emerging sector in the realm of renewable energy, involves the production of hydrogen through the electrolysis of water using renewable energy sources, earning it the moniker ‘green hydrogen.’ Hydrogen plays a pivotal role in industries such as refineries, steel plants, and ammonia production. Importantly, its manufacturing process is environmentally friendly.

It’s worth noting that the Central Government has already launched the National Green Hydrogen Policy-2022 and Mission, aiming to produce 50 lakh tonnes of green hydrogen by 2030. With the ‘Rajasthan Green Hydrogen Policy-2023,’ the state is poised to make a significant contribution to this national endeavor, harnessing its renewable energy potential and fostering clean energy development.

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