Shares of several companies that have expressed interest in foraying into the production of green hydrogen rose on February 18 after the government notified the National Hydrogen Mission policy.
On February 17, the government announced phase one of the new policy that looks to bolster green hydrogen production capacity in the country in the coming year with several incentives for companies.
Under the policy, the government has waived off transmission charges for 25 years for such units, allowing them to buy renewable power from exchanges or their own unit and bank unconsumed renewable power for up to 30 days with power distribution companies.
The mission’s announcement comes after India committed to becoming net carbon zero economy by 2070 at the recently concluded COP26 Summit. “This will help in meeting the target of production of 5 million tonnes of Green hydrogen by 2030 and the related development of renewable energy capacity," the statement from the power ministry said.
“We believe India’s competitive edge coupled with the government’s efforts would not only make merchant Green H2 highly viable but also potentially make India the cheapest Green H2 producer globally,” brokerage firm Edelweiss Securities said in a note.
Analysts believe that the impetus given towards the use of renewable energy for the production of hydrogen to be used as an energy source should be beneficial for power companies like NTPC, ReNew Power, and power infrastructure companies like Thermax and Larsen & Toubro.
Further, brokerage firm Goldman Sachs reportedly said that the biggest beneficiary of the new policy will be companies like Reliance Industries, which have recently announced investments in the production of green hydrogen.
The brokerage firm, however, said that benefits of this policy will accrue towards the end of the decade as cost structure declines and the demand pool becomes meaningful. Goldman Sachs said that hyper integration of RIL could position it as a low-cost hydrogen supplier.
At 9:24 am, shares of RIL, L&T, Thermax, NTPC, and MTAR Technologies rose up to 1 percent each on the National Stock Exchange.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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