The Ministry of New and Renewable Energy (MNRE) has allocated ₹44.4 billion to stimulate the production of electrolysers, with the aim of reducing costs for hydrogen generation under the National Green Hydrogen Mission (NGHM). Until 2029-30, NGHM has designated ₹197.44 billion to foster the establishment of a green hydrogen production capacity of five million tons annually. The initiative foresees an investment of over ₹8 trillion by 2030.
Incentives targeting domestic manufacturing, as part of the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme, component I (incentive scheme for electrolyser manufacturing tranche II), will be effective from the fiscal year 2025-26 to 2029-30.
The program aims to enhance the global competitiveness of domestically produced electrolysers by enhancing their performance and quality, as well as expanding their supply chains. It also aims to assist both established and emerging electrolyser technologies. The incentive initiative will be managed by the Solar Energy Corporation of India (SECI) as the nodal agency.
SECI will oversee a competitive bidding process to select manufacturers, considering factors such as the annual specific energy consumption (SEC) of the electrolysers manufactured over the five-year period, set targets for local value addition (LVA), and a performance-based incentive framework.
The incentives will follow a decreasing format, starting with a base incentive of ₹4,440 per kW in the initial year and decreasing progressively over five years. Payments to manufacturers will be determined by performance multipliers linked to the achieved SEC and the level of DVA achieved.
The regulations stipulate that the SEC for hydrogen production must not exceed 56 kWh per kilogram, measured at full rated capacity on the DC side of the stack, with a demonstration required before electrolyser commissioning. Additionally, the electrolyser must ensure a minimum lifespan of 60,000 hours, and there should be an LVA of at least 40 percent for alkaline electrolysers and 30 percent for other technologies during the initial year of manufacture.
As part of its effort to support domestic stack technologies, the program also establishes distinct capacity buckets for various types of electrolyser manufacturing. These include the established bucket 1 with a capacity of 1,100 MW, the domestically developed bucket 2A with a capacity of 300 MW, and the smaller domestic bucket 2B with a capacity of 100 MW. However, to maintain a balanced scale, no single bidder can be assigned more than 300 MW across different tranches of this program.
The manufacturer, whether a single entity or a joint venture, must demonstrate a net worth exceeding 10 million per MW of quoted capacity for the preceding fiscal year for bucket 1, and 3 million for bucket 2, in order to participate in the bidding process. As reported by RenewableWatch, in the second tranche, there is a total bidding capacity of 1,500 MW, with minimum bid sizes set at 100 MW for both bucket 1 and 2A, while bids can vary between 10 MW and 30 MW for bucket 2B.
