SECI invites bids for green hydrogen production and incentive scheme

The government wants to promote and maximise production of green hydrogen and its derivatives in India to enable rapid scale-up, technology development and cost reduction.

The Solar Energy Corporation of India (SECI) has invited bids for the selection of green hydrogen producers under the first tranche of the government's Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.

The combined capacity of green hydrogen production in this tranche will be 450,000 metric tons per annum (MTPA). The bids have been invited in two buckets - technology agnostic pathways (410,000 MTPA); and biomass-based pathways (40,000 MTPA), stated the request for selection (RfS) document.

The minimum capacity allocated under bucket-I is 10,000 MTPA, while the maximum is 90,000 MTPA. Similarly, the minimum capacity allocated under Bucket-II is 500 MTPA, while the maximum capacity is 4,000 MTPA. The bidder can bid for either one bucket or both. However, the projects will have to be quoted in multiples of 500 MT only.

After being approved by the Union Cabinet on January 4, the government released a blueprint for its ambitious National Green Hydrogen Mission (NGHM) on January 13, with a total initial outlay of Rs 19,744 crore, including Rs 17,490 crore for incentives. Nearly Rs 13,000 crore of the Rs 17,490 crore will be given as incentives for the production of green hydrogen and the remaining Rs 4,490 crore will be for the manufacturing of electrolysers, for which SECI issued another RfS. The government aims to produce 5 million tonnes of green hydrogen annually and make India a global green hydrogen hub.

Production facilities awarded under this RfS will be eligible for getting direct incentives by SECI in rupee per kilogram of green hydrogen production on an annual basis for a period of three years from the date of commencement of green hydrogen production (CoD). The incentives will be capped at Rs 50 per kg in the first year of production, Rs 40 per kg in the second year and Rs 30 per kg in the third year of production.

The last date to submit the bids is September 7, 2023 and bids will be opened on September 12. The RfS document stated that the projects must be commissioned within 30 months from the date of receiving the letter of award.

"The producer shall be required to set up production facilities in thousand metric ton (TMT) scale for production green hydrogen and/or its derivatives," read the document. With this, the government wants to promote and maximise the production of green hydrogen and/or its
derivatives in India to enable rapid scale-up, technology development and cost reduction.