Green hydrogen policy of Indian Government

Frequently Asked Questions on green hydrogen policy

        <h5>Most frequent questions and answers</h5>        
        <h4>What is green hydrogen policy?</h4>     
    <ul><li>Under the policy, the government is offering to set up <strong>manufacturing zones for production</strong>, connectivity to the <strong>ISTS (Inter-State Transmission System)</strong> on priority basis, and<strong> free transmission for 25 years</strong> if the production facility is commissioned before June 2025.</li><li>This means that a <a href="https://www.drishtiias.com/daily-news-analysis/green-hydrogen-1" target="_blank" rel="noopener"><strong>green hydrogen</strong></a> <strong>producer will be able to set up a solar power plant</strong> in Rajasthan to supply renewable energy to a green hydrogen plant in Assam and would not be required to pay any inter-state transmission charges.<ul><li>Besides, producers will be allowed to set up<strong> bunkers near ports for storage</strong> of green ammonia for export by shipping.</li></ul></li><li>Manufacturers of Green hydrogen and ammonia are allowed to <strong>purchase renewable power</strong> from the power exchange or <strong>set up Renewable Energy (RE) capacity</strong> themselves or through<strong> any other developer, anywhere.</strong></li></ul>      
        <h4>What are the challanges in implementation ?</h4>        
    <ul><li><strong>Charges on Transmission:</strong> Producing 1kg of green hydrogen takes about 50kWh of electricity (with electrolyser efficiency of 70%).<ul><li>While India boasts one of the world’s lowest average costs of RE generation, it <strong>levies a plethora of charges on wheeling and transmission</strong> of electricity between the points of generation and consumption.</li></ul></li><li><strong>Lesser Cost-Effective than Green Hydrogen</strong>: In cases where the green hydrogen is produced from a remotely-located RE plant, the landed cost of power determines the cost of output which ranges from ₹3.70 to ₹7.14 per kWh.<ul><li>At this rate, green hydrogen will be made at a cost of about ₹500 per kg, which is <strong>nearly 3.5 times the cost of <a href="https://www.drishtiias.com/daily-news-analysis/national-hydrogen-energy-mission" target="_blank" rel="noopener">grey hydrogen.</a></strong></li><li>So the <strong>landed cost of RE from a distant source will need to at least be halved</strong> to make green hydrogen competitive vis-a-vis grey.</li></ul></li><li><strong>Reluctance of States</strong>: Many public sector electricity utilities are<strong> unwilling to let go of their monopoly in power distribution.</strong> The RE-rich states are either moving away from allowing RE banking or introducing regulations to restrict this facility.<ul><li><strong>Gujarat</strong> allows settlement for banked solar power only between 7am and 6pm and <strong>levies ₹1.5 per unit</strong> as its banking charges for ‘high-tension’ consumers.</li><li><strong>Rajasthan</strong> permits banking of up to 25% of RE generation and settlement on an annual basis, but<strong> levies a 10% charge, among the highest in India.</strong></li><li>Tamil Nadu and Andhra Pradesh<strong> do not allow RE banking.</strong></li><li>Also, <strong>most states do not permit banked energy to be drawn during the peak hours.</strong></li></ul></li></ul>     
        <h4>Significance of green hydrogen policy ?<br></h4>        
    <ul><li>India’s largest oil refiner, Indian Oil Corp (IOC) estimates that GHP measures will <strong>reduce the cost of green hydrogen production by 40-50%.</strong></li><li>Fuels like Green Hydrogen and Green Ammonia are vital for any nation's <strong>environmentally sustainable energy security.</strong></li><li>India has already committed to achieving <a href="https://www.drishtiias.com/daily-news-editorials/towards-net-zero#:~:text=In%20this%20context%2C%20India%20at,major%20contributors%20to%20global%20warming." target="_blank" rel="noopener"><strong>net-zero carbon emissions by 2070</strong></a>, and green hydrogen will play a<strong> significant role as a disruptive feedstock</strong> in India's transition from oil and coal.</li><li>The GHP lays a solid <strong>foundation for developing a competitive green hydrogen sector</strong> in India.</li></ul>     
        <h4>What do I need to open the files ?<br></h4>     
    Contrary to popular belief, Lorem Ipsum is not simply random text. It has roots in a piece of classical Latin literature from 45 BC, making it over 2000 years old. Richard McClintock, a Latin professor at Hampden-Sydney College in Virginia, looked up one of the more obscure Latin words