India will exempt transmission fees for renewable power used in hydrogen manufacturing plants built up before January 2031, extending a waiver previously available for projects set up before July 2025, as reported by Reuters on April 11. According to sources familiar with the matter, the move will enable more green hydrogen projects to qualify for the 25-year waiver of transmission charges, thus reducing the manufacturing costs. A government official explained that large-scale hydrogen and ammonia projects will require three to four years to construct, which means that many of them may not come into operation by June 2025.

India aims to become the world’s cheapest producer of green hydrogen- hydrogen produced by splitting water using electricity from renewables. It plans to bring down the manufacturing cost from current levels of USD4-5 per kilogram(kg) to between USD1-1.5 per kg. According to industry estimates, renewable energy, including transmission, accounts for 65%-70% of the cost of producing green hydrogen. Therefore, the government official stated that every one rupee decrease in renewable energy costs would result in a 60 Indian rupee (USD 0.73) reduction in the cost of green hydrogen. The inter-state transmission charges range from 1-2 rupees per unit of power transmitted. Besides waiving transmission fees, the Indian government will provide green hydrogen fuel producers with incentives worth at least 10% of their costs, under a USD2.11bn program called “Strategic Interventions for Green Hydrogen Transition (SIGHT) Program”. The scheme, effective June 2023, is intended to produce affordable green hydrogen and reduce greenhouse gas emissions. 

S****ources:

https://www.reuters.com/business/sustainable-business/india-extends-transmission-fee-waiver-green-hydrogen-plants-source-2023-04-11/

https://energy.economictimes.indiatimes.com/news/renewable/india-plans-green-hydrogen-incentives-of-at-least-10-per-cent-of-cost-source/99282302

https://www.reuters.com/business/environment/india-approves-2-billion-incentive-plan-green-hydrogen-industry-2023-01-04/