Bulk demand tender for green hydrogen soon

Demand for aggregation to help volume for its commercial supply

The Centre will issue tenders based on the ‘demand aggregator’ model for green hydrogen. The Ministry of New and Renewable Energy (MNRE) in its latest Cabinet note has proposed that demand for green hydrogen from key sectors, such as fertiliser, steel, and refinery, will be aggregated and offered as a mega tender.

The Cabinet note has been sent to the ministries of petroleum and natural gas, law, Department of Fertilizers, among others, for their remarks. The demand aggregation will help in creating substantial volume to facilitate commercial supply of green hydrogen.

MNRE has proposed that Solar Energy Corporation of India (SECI) can host the bidding process, unless any other agency is not suggested by the other ministries. SECI is the nodal agency under MNRE for tendering solar and wind power projects. Senior officials said the new National Hydrogen Mission — which is in the works — will outline the purchase obligation of green hydrogen for several industries. “This will, in turn, help in designing the tender as the demand calculations will be available,” said an official.

Union Minister for Power, New and Renewable Energy R K Singh last month had said green hydrogen would be included in the renewable purchase obligation (RPO) regime. RPO entails states/ power distribution companies to purchase a certain portion of their energy demand from green energy sources.

MNRE is hoping that with the mega tender, the cost of green hydrogen will also come down. A similar bidding model was followed for light-emitting diode distribution, where the cost came down to ~60 per bulb, from over ~300 in two years. “Several players are interested in green hydrogen, including oil firms. This will give them an incentive to produce more,” said the official.

State-owned thermal power giant NTPC, Adani Enterprises, new entrant Reliance Industries, ACME Solar, and state-owned oil-marketing company Indian Oil have announced their foray into green hydrogen production.

Green hydrogen is produced using renewable energy and electrolysis to split water. This is from grey hydrogen, which is produced from methane and releases greenhouse gases into the atmosphere, and blue hydrogen, which captures those emissions and stores them underground.