The Ministry of New and Renewable Energy (MNRE) has set up a framework within the strategic interventions for green hydrogen transition (SIGHT) initiative, to encourage the production and distribution of green ammonia at the most cost-effective rate.
Under this system, there will be incentives given for the production and distribution of green ammonia for a period of three years. The total budget for the incentive scheme for producing green hydrogen and its derivatives is Rs 130.5 billion.
In the first year, the incentive rate is Rs 8.82 per kg, which decreases to Rs 7.06 per kg in the second year and then further decreases to Rs 5.30 per kg in the third year. If hydrogen and its derivatives are produced and supplied under the SIGHT program, they cannot receive incentives from two different modes at the same time.
The Solar Energy Corporation of India (SECI) will be responsible for carrying out the tasks assigned by MNRE, which include receiving and reviewing applications, issuing acknowledgments and awards, examining incentive claims, and verifying claims with the necessary documents.
SECI will collect data on the progress and success of the program and provide quarterly reports to MNRE. SECI will receive an administrative fee of 0.5 percent of the total incentive amount distributed each year.
The first phase of mode 2A permits the bidding of 550,000 metric tonnes of green ammonia per year. If more capacity is needed, the MNRE will decide for future phases. SECI has the authority to establish a minimum capacity requirement for bids.
In addition, SECI may limit the maximum amount of capacity that can be given to a single bidder. This assigned capacity will stay the same for three years. Successful bidders will receive incentives each year after submitting a valid claim that has been verified by MNRE through SECI.
To qualify for rewards, the bidder must adhere to the national green hydrogen standard set by MNRE when using green hydrogen for producing and distributing green ammonia. The calculation considers the ratio of 0.1765 kg of green hydrogen per kg of green ammonia, affecting both the amount of green hydrogen used and the corresponding incentive received for a specific quantity of green ammonia.
A committee, led by the secretaries of the Department of Fertilizers and MNRE, along with the mission director of National Green Hydrogen Mission and other experts, will consistently evaluate the advancement and effectiveness of green ammonia production capabilities.
Reference- Press Information Bureau, Mint, MNRE website, SECI website, Economic Times, WRI India, World Economic Forum