R Ok Singh: ‘Green hydrogen push for refining, fertiliser sectors; PLI for electrolysers in the works’

The authorities is engaged on plans to spice up the usage of inexperienced hydrogen within the oil refining and fertiliser manufacturing sectors, together with a possible announcement on a Production Linked Incentive (PLI) scheme for electrolyser manufacturing to offer an impetus to the home hydrogen worth chain. Speaking to The Indian Express, Union Power and Renewable Energy Minister R Ok Singh stated the coal scarcity scenario this time is severe and is being dealt with at an inter-ministerial stage, and that the scenario presents each a problem and a chance on the identical time. He additionally talked of a bundling plan for future renewable vitality bids. Edited excerpts:
The coal scarcity in China is resulting in severe disruptions in energy provides. How severe is our personal depleting coal shares scenario?
China appears to be having an enormous disaster. Thank God, we’re managing. The demand has gone up tremendously. We touched 200 Gigawatts (one GW is a thousand mega watts) through the Covid interval, and the demand has been hovering round 170-180 GW, constantly. I count on the demand to go up once more to close about 200 GW and keep there. So, that is stretching our sources… We have needed to handle coal (provides). I had a gathering with the Minister for coal and the Minister for railways and we deliberate as to how we will meet this, as a result of the requirement of coal goes to go up considerably.
How a lot of that is one thing that’s seen yearly post-monsoons, when there may be inevitably a coal scarcity section?
This is past the (regular) publish monsoon (provide crunch). I’ve been right here for some years now, I haven’t seen one thing like this on a steady foundation… Demand will not be going to go away, it’s going to extend an increasing number of. That’s what I inform my officers, it isn’t one thing that’s only a passing section… as a result of we’ve added so many new customers… Most of them are decrease center class customers and poor so they’re shopping for followers, lights, televisions units so their demand is rising. The good factor is also that we additionally see that this is a sign of the elevated financial exercise within the nation, so that may be a good factor. I see it as a problem however I see this additionally as a chance. alternative within the sense that I had some models which weren’t being utilised now they’re all being utilised.
There is an anomaly within the case of renewables by way of those that’ve purchased energy from builders earlier find yourself paying extra. So, thereis a perverse incentive to maybe wait.
This has struck us. We are engaged on a proposal which must be taken up in a number of days that sooner or later, bids might be bundled. If there may be one bid, suppose you get a charge of Rs 2.5 (per unit) and the PPA (Power Purchase Agreement) is signed (between the era utility and the Discom). In the subsequent bid, suppose SECI (Solar Energy Corporation of India) will get Rs 2.40 per unit then it will likely be averaged out. The one that signed it at Rs 2.50 (per unit) will get it on the common of Rs 2.50 and Rs 2.40 and the contemporary PPAs might be at that common. Similarly, if a 3rd bid comes at (Rs) 2.30, so now it would once more be aggregated and the PPA might be on the new resultant charge and all of the individuals who signed earlier may even pay solely at that resultant charge. This will maintain it.
What concerning the authorities’s inexperienced hydrogen push?
What we’re going to do is that we’re going to put a mandate. Now, gray hydrogen and gray ammonia (each generated from pure fuel or methane, via a course of known as steam reforming) might be progressively changed by the inexperienced hydrogen and inexperienced ammonia (generated utilizing renewables). Now the place is gray hydrogen used? One is after all refining, it’s a significant sector. So we’re going to put a mandate, let’s say starting with 15 per cent or 20 per cent, the place 20 per cent of what they’re consuming to start with must be inexperienced hydrogen after which it would go as much as perhaps 30-40 p.c. And in 4 years we count on the worth of inexperienced hydrogen to match that of gray hydrogen. In a most of 4 years, the costs will come down. After that no mandate might be needed…
Similarly we’re going to put up a mandate for mixing of PNG and LNG with inexperienced hydrogen. You can mix as much as 15 per cent with none change within the chemistry of the pipes. For fertilisers, the whole gray ammonia which is used is 15 million tonnes, which needs to be changed. What is imported is 2.6 million tonnes. So the whole which needs to be changed is 17.6 million tonnes. As far as gray hydrogen is anxious, it comes to five.2 million tonnes which needs to be progressively changed.

Is there a scheme for pushing home manufacturing of electrolysers?
Earlier, we had began the talks of mandates at 10 p.c in refining and 5 per cent for fertiliser manufacture, however we are going to increase that to fifteen or 20 per cent (for refining). But, within the earlier trajectory (10 p.c) alone our requirement for electrolysers is about 8,800 MW. There isn’t that a lot capability on this planet. In the world, the whole manufacturing capability for electrolysers which is put in is nearly 2,000 MW. So, naturally now we have to make our personal electrolysers. So, that is without doubt one of the proposals that we want a PLI (manufacturing linked incentive scheme) for electrolyser manufacturing as a result of there isn’t a world provide.
How a lot manufacturing capability for electrolysers are we aiming to create in India?
I’m considering of one thing within the vary of about 15,000 MW over 5 years. In reality we wish no less than 10,000 MW within the subsequent two years or three years as a result of with out that we won’t be able to start out. One inexperienced hydrogen plant has been arrange (by a personal participant). That is nearly 1 mega watt. That electrolyser needed to be imported. For them the price was I feel $350 or $300 per kilowatt.
The value of establishing a plant for manufacturing will not be very a lot. The capital value of establishing a 1,000 MW electrolyser plant is about Rs 125 crore. The PLI we’re proposing is $50 per kilowatt. There might be bidding, however the ceiling could be $50 per kilowatt.