Q. Why is this in news?
A. The Ministry of Power has notified the first part of the National Hydrogen Mission policy on green hydrogen and green ammonia, aimed to boost production of hydrogen and ammonia using renewable energy.
Q. What is green hydrogen?
- Green hydrogen is hydrogen gas produced through electrolysis of water.
- It is an energy intensive process for splitting water into hydrogen and oxygen— using renewable power to achieve this.
Q. What are the Key takeaways of the Green Hydrogen Policy?
- The new policy offers 25 years of free power transmission for any new renewable energy plants set up to supply power for green hydrogen production before July 2025.
- This means that a green hydrogen producer will be able to set up a solar power plant in Rajasthan to supply renewable energy to a green hydrogen plant in Assam.
- It would not be required to pay any inter-state transmission charges.
Q. What are the incentives?
- The government is set to provide a single portal for all clearances required for setting up green hydrogen production.
- It will facilitate producers to transfer any surplus renewable energy generated with discoms for upto 30 days and use it as required.
- The requirement of time bound clearances for these projects would spur investment while grid connectivity on priority will ease operational processes.
- The energy plants set up to produce green hydrogen/ammonia would be given connectivity to the grid on a priority basis.
- State DISCOMS may also procure renewable energy to supply green hydrogen producers but will be required to do so at a concessional rate.
- Such procurement would also count towards a state’s Renewable Purchase Obligation (RPO) under which it is required to procure a certain proportion of its requirements from renewable energy sources.
Q. Why such move?
- The move is likely going to make it more economical for key users of hydrogen and ammonia such as the oil refining, fertiliser and steel sectors to produce green hydrogen for their own use.
- These sectors currently use grey hydrogen or grey ammonia produced using natural gas or naphtha.