The Uttar Pradesh Green Hydrogen Policy seeks to lower the cost of hydrogen over five years to $2/kg and eventually to $1/kg.
The state also plans to blend 20% green hydrogen into the total hydrogen used by the refinery and fertiliser plants now in operation by 2028, with the ultimate objective of reaching 100% green hydrogen by 2035.
The draught policy suggests a capital expenditure subsidy in 2024 equal to 60% of the electrolyzer’s price. The minimum capacity needed to be eligible for the subsidy is 50 MW or more. The state government’s financial incentive will be cut in half to 20% by 2027.
The main barrier to the widespread use of green hydrogen is its expensive price. In the state, green hydrogen costs somewhere between $2.8 and $7 per kilogram.
The program places a strong emphasis on the value of fostering innovation to gradually save expenses. The state currently needs about 0.9 million tonnes of hydrogen annually, which is mainly utilised to make nitrogenous fertilisers.
The strategy concentrates on the chemical, fertiliser, and refinery industries to launch the state’s transition to a green hydrogen economy.
Almost 55% of the state’s industrial emissions come from these industries. States can reduce a sizable amount of their emissions by promoting green hydrogen.
Over the following five years, the policy will be in force.
Under the leadership of the extra chief secretary or principal secretary of the Department of Additional Sources of Energy, a state-level committee will be established to carry out all tasks, including monitoring and evaluating policies.
Monetary Rewards from The State Government
An additional subsidy of ₹3,500 per tonne of green urea generated in the state will be available in addition to the 10% blending share in overall production.
The proposal also suggests a 30% one-time grant support for technology purchases for R&D centers and enterprises, up to a maximum of ₹50 million.
Projects producing green hydrogen and ammonia that use water will not be subject to land tax, land uses conversion fees, stamp duty, or industrial water usage fees.
The state would reimburse the total amount of Goods and Services Tax (SGST) that was used to produce green hydrogen and ammonia.
Only 50% of the costs associated with intrastate transmission and wheeling will be applied to electricity used to produce green hydrogen and ammonia. There won’t be any cross-subsidy or distribution surcharges.
The goal of the policy is to support the creation of a sustainable, green hydrogen/ammonia ecosystem. It fosters the creation of a center of excellence with a variety of academic and industrial institutions as well as research facilities.
The center will also support a program for skill development to get the state’s workforce ready for the switch to green hydrogen and ammonia.
To help India reach its production goal of 5 million tonnes of green hydrogen by 2030 and the accompanying expansion of renewable energy capacity, the Ministry of Electricity established a “Green Hydrogen Policy” in February.
Source: All India Solar
