India has unveiled its Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme Component-II, focusing on Mode-2B’s Incentive Scheme for Procurement of Green Hydrogen Production under the National Green Hydrogen Mission. The scheme, part of the larger National Green Hydrogen Mission with an approved outlay of ₹19,744 crore until FY 2029-30, aims to maximize Green Hydrogen production, enhance cost competitiveness against fossil-based alternatives, and promote large-scale utilization.
The financial backing for this initiative will be sourced from the budget allocated to the National Hydrogen Mission Head. The scheme will be implemented by Oil & Gas companies and the Centre for High Technology (CHT), acting as the aggregators of demand and facilitators for bids in a competitive selection process.
Under Mode 2B, the focus is on aggregating demand and calling for bids for Green Hydrogen production and supply at the lowest cost, specifically for a single refinery or multiple refineries. The objective is to provide a fixed incentive to encourage the production of Green Hydrogen. The Ministry of New and Renewable Energy (MNRE) has issued this scheme with the approval of the Honorable Minister of New and Renewable Energy.
The Incentive Scheme for Green Hydrogen Production and Supply under Mode 2B has an overall outlay of ₹13,050 Crore. The scheme’s objectives align with the broader mission, emphasizing maximizing production, enhancing cost-competitiveness, and encouraging large-scale utilization of Green Hydrogen. The transparent selection process for awarding incentives will be implemented through Oil & Gas companies and CHT, with specified roles and responsibilities for each.
Oil & Gas companies, as implementing agencies, will aggregate demand, examine applications, issue acknowledgments, and play a crucial role in the scheme’s execution. CHT will provide secretarial, managerial, and implementation support, including the examination of beneficiaries’ claims, verification, and reconciliation of disbursement claims. The administrative charges for these services amount to 0.5% of the incentive amount, disbursed on an annual basis.
To qualify for incentives, bidders must adhere to the criteria outlined in the ‘National Green Hydrogen Standard’ notified by MNRE. Incentives, provided for three years, are directly linked to the production and supply of Green Hydrogen. The incentive amounts are set at Rs. 50/kg in the first year, Rs. 40/kg in the second year, and Rs. 30/kg in the third year.
The selection process involves competitive bidding, with bidders quoting annual production capacity and the price per kg for the supply of Green Hydrogen. Qualified bidders are allocated capacities based on the quoted price of supply, ensuring the least quoted price is prioritized. The net worth of the bidder and the capacity available for bidding under Tranche I of Mode 2B are crucial considerations.
Allocated capacity remains constant throughout the Hydrogen Purchase Agreement, with incentives disbursed annually based on successful bidder claims. Bidders are required to submit Earnest Money Deposit (EMD) at the time of bid submission. Forfeiture conditions, penalties, and compliance requirements are specified in the tender document. A Scheme Monitoring Committee (SMC) will periodically review the status of implementation and performance of Green Hydrogen production and supply capacities awarded under the scheme. The committee will recommend measures to resolve difficulties, and MNRE, in consultation with the Ministry of Petroleum and Natural Gas (MoPNG), retains the authority to make necessary amendments in the Scheme Guidelines with the approval of the Hon’ble Minister of New & Renewable Energy. This initiative marks a significant stride in India’s commitment to green energy and sustainable practices.
Please view the document below for more details.
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