India to seek bids to set up green hydrogen plants by May - sources

FILE PHOTO: FILE PHOTO: Workers clean photovoltaic panels inside a solar power plant in Gujarat

By Sarita Chaganti Singh

NEW DELHI (Reuters) - India will by May invite bids for subsidies for setting up green-hydrogen manufacturing and utilisation hubs, fertiliser and steel plants based on the fuel, and factories for making electrolysers, two government sources told Reuters.

The bidding process is part of a first phase of a $2 billion incentive plan announced last week to boost use of green hydrogen to cut emissions and make India a major exporter in the field.

Green hydrogen is hydrogen made with renewable energy. The plan aims at using it in fertiliser and steel production in place of hydrogen made with fossil fuels, blending it into urban gas supply gas and promoting its use in transportation.

The Ministry of New and Renewable Energy did not respond to a query sent by Reuters.

Establishing electrolyser factories and hubs for making and using green hydrogen could attract interest from such big companies such as Reliance Group and Adani Group, which have already committed billions of dollars to green-hydrogen activities. Electrolysers are devices for making hydrogen.

The government will call witin three to four months for competitive bids for establishing two green hydrogen hubs, two government sources, who did not want to be named, told Reuters.

In the same period it will seek bids for setting up two fertiliser plants using green hydrogen and green ammonia - ammonia made with green hydrogen - they said.

It will subsidise establshment of the activities proposed by the winning bidders, which will retain ownership.

The government intends to award contracts within a year, both sources said.

Other countries are working in this field, but high costs of transporting and storing hydrogen and of making electrolysers are key issues that need to be resolved

The plan, called the National Green Hydrogen Mission, aims at substituting all ammonia-based fertiliser imports with domestic fertilisers using green ammonia by 2034-35.

The government wants India to produce 5 million tonnes of green hydrogen annually by 2030.

Similarly, steel projects using 100% green hydrogen will be set up, according to two sources.

The hydrogen plan is to be implemented in phases. Up to 2025-26, sectors already using hydrogen will be converted to green hydrogen and low-cost electrolyser manufactuing will be set up.

In the second phase, between 2026-27 and 2029-30, production of commercial-scale green hydrogen in steel and mobility sectors will be explored, the two officials said.

The phase 1 projects will begin manufacturing in two years, the two officials said.

(Reporting by Sarita Chaganti Singh; Editing by Bradley Perrett)