Green hydrogen push: Govt plans Rs 15,000 crore PLI scheme for electrolyser manufacturing

On the Independence Day, Prime Minister Narendra Modi announced 'National Hydrogen Mission' to make India the new global hub of green hydrogen.

CNBC-TV18 learns from sources that a production-linked incentive scheme of Rs 15,000 crore is being worked out to push for electrolyser manufacturing in India.

The green hydrogen is produced by splitting of water using an electrolyser using electricity from renewable sources.

The PLI for electrolysers is likely to be computed on sales volume, performance multiplier, base PLI quote which is expected to be at $60 per kilowatt of electrolyser capacity. It is expected that $10/kw cost reduction will be seen each year during the period of the PLI scheme for the electrolyser manufacturing.

Domestic value addition like other PLI schemes will be key. The timeline for the scheme is expected to be 5 years starting FY24. The ultimate aim of the government is to bring down the cost of green hydrogen to $1 per kg and have 5 million metric tonne per annum (MMTPA) green hydrogen capacity by 2030 in India.

Sources also tell CNBC-TV18 that government may also look at concessional goods and services tax (GST) at nil for domestically manufactured electrolysers for the 5-year period.

The target of the green hydrogen mission will be to accelerate cost reduction, bring in free transmission, green open access, reduce capital cost by way of dollar dominated bids and renewable energy certificates to make green hydrogen cheaper and viable in India.

*In India, green hydrogen can help in two ways - energy security and decarbonisation of the economy. It can substitute fossil fuels used in industries including fertilisers, chemicals, petrochemicals, refineries and steel units. Kickstarting a small share of green hydrogen to substitute grey hydrogen can create a substantial market. Gradually, with the economies of scale and innovation green hydrogen could become a competitive fuel," said Rajat Seksaria, CEO, ACME Group.