First Off The Blocks: Bids Invited For Setting Up 4.5 Lakh MT Green Hydrogen Production Facility

The Union government on Monday invited bids to select green hydrogen producers for setting up 450,000 metric tonnes per annum production facilities.

The tender, issued under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Scheme, is first such tender for developing hydrogen production centres as envisaged under the National Green Hydrogen Mission.

The Solar Energy Corporation of India (SECI), under the Ministry of New and Renewable Energy (MNRE), is the implementing agency for the scheme.

Green Hydrogen

Hydrogen is a key industrial fuel that has a variety of applications including the production of ammonia (a key fertiliser), steel, refineries and electricity.

The energy industry refers to different 'types' of hydrogen to differentiate how it is produced. Although the production of hydrogen remains primarily 'grey' at the moment, the future of hydrogen is 'green'.

The vast majority of industrial hydrogen is currently produced from natural gas through a conventional process known as steam methane reforming (SMR). The standard SMR process produces what is known as Grey Hydrogen and has the major disadvantage of releasing large quantities of by-product CO₂ into the atmosphere — the main culprit for climate change.

Grey hydrogen has increasingly been produced also from coal, with significantly higher CO₂ emissions per unit of hydrogen produced so much that it is often called brown or black hydrogen instead of grey.

The diverse pathways to produce hydrogen mean we can produce it using renewable energy sources, such as wind or solar. That makes green hydrogen the cleanest option — hydrogen from renewable energy sources without CO₂ as a by-product.

Green hydrogen is defined as hydrogen produced via electrolysis, the splitting of water into hydrogen and oxygen with electricity generated from renewable energy sources such as solar or wind. This is the most environmentally sustainable way of producing hydrogen.

Pathways-Based Bidding

According to the bid documents, the green hydrogen producers (GHP) shall be eligible to set up production facilities under two ways, namely, technology agnostic pathways (TAP) and biomass based pathways (BBP).

Under the TAP, there will be 4.10 lakh MT per annum of Green Hydrogen available for bidding, while under the BBP Bucket, 40,000 MT per annum of Green Hydrogen will be available.

The total capacity to be allocated to a bidder shall be limited between 10,000-90,000 tonnes per year for 'technology agnostic' pathways and 500-4,000 tonnes per year for ‘biomass-based pathways’, with the maximum allocation to a single bidder restricted to 90,000 MT per annum.

The production facilities awarded under this tender will be eligible for getting direct incentive by SECI in terms of rupees per kg of green hydrogen production on annual basis for a period of three years from the date of commencement of green hydrogen production.

The maximum time allowed for commissioning of the production facilities in both the pathways has been kept at 30 months from the date of the letter of award.