India will give green hydrogen producers a subsidy of at least 30 rupees ($0.36) per kg, Reuters reports, citing an unidentified “top government official”.
A separate article by Indian business news website Mint states that the country will offer 50 rupees per kilogram in the first year, “which will be brought down and capped at 30 rupees per kg in the third year”, according to two anonymous sources.
By comparison, the US is offering production tax credits of up to $3/kg — 88% higher than 30 rupees — while the EU is set to have an auction-based system with a subsidy price cap of €4 ($4.36) per kg.
With 130bn rupees ($1.59bn) set aside for India’s green hydrogen production support scheme, a 30-rupee price would support 4.33 million tonnes of renewable H2.
But in a global marketplace, the relatively low subsidies might put off international investors, who could get higher returns on their investments in the US or EU.
The Indian government will start a bidding process for green hydrogen producers seeking incentives before the end of June, Reuters reported, with the lowest bidders being awarded contracts in three tranches of funding. Mint also says there will be a competitive bidding process.
Mint adds that applicants will have to have developed at least 500MW of renewables or 100,000 tonnes of hydrogen (or 500,000 tonnes of ammonia or methanol) over the past four years.
The Reuters source added that the administration expects the scheme to support 3.6 million tonnes of renewable H2 production in the next three years.
In addition, India has set aside 44.9bn rupees to subsidise about 3GW of local electrolyser production annually for five years, with the first tranche of support — worth 4,400 rupees per kilowatt — to be allocated by the end of June, and the second in the third quarter of 2023, Reuters reports. But Mint says there will be two 1.5GW auction rounds in the second and fourth quarters of 2024.
The Indian website says that the 4,400-rupee figure will only be offered for the first year, and will be subsequently reduced every year.
And it adds that applicants for this funding “should have experience producing at least 100MW of electrolyzers over the previous two years or should demonstrate technology partnerships with an entity which has produced at least 100 MW of electrolyzers during the same period”.
This article was updated to add information from the Mint report.