India's Green Hydrogen Auction Reveals Pricing and Challenges Ahead
Key Ideas
  • India's first reverse auction for green hydrogen showcased pricing potential at ₹400 per kg, with winning bids from L&T Energy Green Tech and competitive quotes from other companies.
  • The India Hydrogen Alliance is advocating for Hydrogen Purchase Obligations (HPOs) to stimulate demand, safeguard investments, and meet 2030 green hydrogen production targets.
  • Proposed HPOs target 47 existing and new refinery and ammonia plants across India, with a focus on achieving 1.5 million metric tonnes of green hydrogen production by 2030.
  • State governments like Gujarat, Odisha, and Andhra Pradesh have introduced incentives to support green hydrogen production, including tax reimbursements, low-cost electricity, and capital subsidies.
India recently conducted its first reverse auction to determine the price of commercial green hydrogen, revealing that it could be priced at ₹400 per kg. L&T Energy Green Tech secured a bid to supply Indian Oil Corporation with 10,000 tonnes annually from its green hydrogen plant in Panipat. While the auction demonstrated promising pricing, there is still a gap to reach the global benchmark of $1 per kg. To boost demand, the India Hydrogen Alliance is proposing Hydrogen Purchase Obligations (HPOs) for refineries and ammonia plants, aiming to stimulate domestic demand and protect investments crucial for achieving green hydrogen targets. Without such obligations, there is a risk of falling short on the 2030 goals, according to experts. Several state governments have introduced incentives for green hydrogen production, highlighting the growing support for the sector. Overall, government policies, demand creation measures, and investments are key to driving the growth of green hydrogen in India.
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