India, a nation committed to sustainability and clean energy, has made a significant stride towards a greener future by launching its first-ever green hydrogen subsidy auction. The government has set ambitious plans to support a maximum of 450,000 tonnes of annual green hydrogen production capacity. However, it is yet to publish a clear definition of what qualifies as ‘green’ hydrogen.

The auction, organized by the Solar Energy Corporation of India (SECI), has a capped capacity of 450,000 tonnes per year. Bidders will receive a maximum of 50 rupees ($0.60) per kilogram in the first year of operation, which will gradually reduce to 40 rupees/kg in the second year and 30 rupees/kg in the third and final year of the subsidy.

Divided into two “buckets,” the auction caters to biomass-based green hydrogen projects and facilities using various technologies for electrolysis. The biomass bucket has 40,000 tonnes per year of capacity, while the technology-agnostic bucket offers 410,000 tonnes of annual production capacity.

Bidders for each bucket will be selected based on the “least average incentive” until the capacity is fully allocated. Any remaining capacity in a bucket may be awarded to bidders from the other bucket if they meet the criteria.

Although previous documents hinted at the publication of a national green hydrogen standard, it has not been released yet by the SECI or the Ministry of New and Renewable Energy websites. It is believed that the standard may include limiting the carbon intensity of green hydrogen to 1kgCO2/kgH2 and requiring an entirely renewable energy source for electrolysis.

While biomass-based projects will not comply with the EU’s renewable H2 standards, which only cover renewable fuels of non-biological origin, it may still be a significant factor in India’s domestic supply of green hydrogen.

The SECI also has the authority to award only part of the requested capacity to bidders, allowing companies a seven-day refusal period before the capacity is offered to another company, with its own seven-day right of refusal.

As of now, no official announcement date has been set for the winning bidders of the subsidy auction.

Hydrogen Insight has reached out to the Ministry of New and Renewable Energy and the SECI for further information on the green hydrogen standard and other details regarding the auction.

India’s first green hydrogen subsidy auction marks a pivotal moment in the nation’s journey towards sustainable and clean energy. By encouraging investment and innovation in green hydrogen production, India is signaling its dedication to creating a greener and more prosperous future for its citizens and the planet.