The Indian government has relaxed eligibility criteria for the exemption of the transmission charge waiver for renewable energy projects supplying power to green hydrogen projects.
Renewable energy projects in India supplying power to green hydrogen or green ammonia production plants will be exempted from payment of transmission charge provided they are commissioned by 31 December 2030. Earlier, the commissioning deadline for such projects was 30 June 2025.
According to government sources, the extension has been granted as green hydrogen production plants usually take 3-4 years to be commissioned. The previous commissioning deadline would have made any waiver on transmission charges redundant for green hydrogen projects.
The waiver is expected to reduce cost of renewable energy production by Rs 1-2 per kilowatt-hour, making a significant impact on the final cost of green hydrogen and green ammonia production.
The Indian government targets large-scale production of green hydrogen at $1-1.50 per kilogram, compared to the present $4-5 per kilogram. Apart from the waiver of transmission charges, the government is believed to working on other incentives as well.
The government is expected to launch a production linked incentive scheme for electrolyzer manufacturing. The scheme will be on the lines of the $3 billion subsidy scheme for solar module manufacturing.
According to media reports, the government is also considering subsidies for consumers of green hydrogen. It could offer a Rs 30-50 ($0.37-0.61) per kilogram subsidy to industrial consumers of green hydrogen. This will incentivize industries like iron & steel, fertilizers, and refining to replace current sources of hydrogen with electrolyzer-based green hydrogen. The government is also expected to introduce a green hydrogen consumption obligation for industrial users in the near future.
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