1. BRIEF BACKGROUND
Subsequent to the launch of the National Green Hydrogen Mission by the Government of India on 15 August 2021, INR 17,490 crore was allocated for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme out of which INR 4,440 crore has been earmarked for a production-linked incentive scheme under the Programme’s Component I, aimed at promoting indigenous manufacturing of electrolysers including building adequate infrastructure, cost reduction, and to ensure global competitiveness and rapid scale-up, for 5 (five) years from the date of manufacturing. Component I of the Programme will be implemented by Solar Energy Corporation of India Limited (SECI).
The Ministry of New and Renewable Energy (MNRE) through its letters dated 28 June 2023 and 16 March 2024 issued scheme guidelines for implementation of component I of the Programme wherein it has outlined the process for conducting bids, eligibility of the bidders, methodology for selection of the bidders, disbursement of incentives to the producers, penalties on the bidders for non-compliances, periodic review of the implementation of the Programme and monitoring of the performance of electrolyser manufacturing capacities awarded under the aforesaid scheme guidelines.
2. SALIENT FEATURES OF COMPONENT I FOR IMPLEMENTATION OF THE PROGRAMME
Annual incentives will be provided based on the manufacturing capacity of the producer, and will gradually decrease every year in the following manner:
The following parameters will apply for selection of bidders:
1. Specific energy consumption of the electrolyser i.e. the kilowatt of energy required for production of 1 (one) kilogram of green hydrogen; and
2. Local Value Addition (LVA) factor to indigenise the electrolyser value chain and ensure that a certain minimum quantity of locally sourced materials is used in the production of electrolysers by the bidders.
The capacity available for bidding under Tranches I and II is 1500 MW each, and is further classified as follows:
1. Tranche I: (i) 1200 MW for electrolyser manufacturing capacity based on any stack technology; and (ii) 300 MW for electrolyser manufacturing capacity based on indigenously developed stack technology
2. Tranche II: (i) 1100 MW for electrolyser manufacturing capacity based on any stack technology; (ii) 300 MW for electrolyser manufacturing capacity based on indigenously developed stack technology; and (iii) 100 MW for electrolyser manufacturing capacity based on indigenously developed stack technology – smaller units
The eligibility criteria of the bidder will depend on the net worth of the bidder per megawatt (MW) of the quoted manufacturing capacity on the last date of the previous financial year and different fiscal thresholds have been prescribed under the tranches.
3. COMMENTS
The Programme represents a substantial advancement in actualising the government's 'Make in India' initiative, by fostering indigenous manufacturing of electrolysers. Moreover, the reduction in the net worth eligibility threshold in the second tranche paves the way for smaller manufacturing entities and nascent start-ups to penetrate the electrolyser manufacturing sector. However, the efficacy and successful execution of the Programme are aspects that will require thorough evaluation and empirical validation.
