The government is working on a draft scheme for firm and dispatchable round-the-clock renewable energy using green hydrogen as storage, people familiar with the development said. The plan under the National Green Hydrogen Mission may offer financial assistance in the form of contract for difference (CFD) or viability gap funding, they said. An initial 100 MW capacity pilot project could be considered under the scheme, they said.
“Discussions are on,” said one of the persons. The government is examining options for financial assistance, which could also be from the National Green Hydrogen Mission (NGHM), the person added. This will mark the first step in the bundling of green hydrogen to generate round-the-clock power. Green hydrogen refers to gas produced using renewable sources.
The NGHM was launched in January 2023 with an initial outlay of INR 19,744 crore, which included INR 17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme and INR 1,466 crore for pilot projects.
This also included INR 400 crore for research and development and INR 388 crore toward other components.
“The amount (for the funding) will depend on the final structure of the scheme,” the person said, adding that the corpus could be notified separately.
Under the norms for the scheme under discussion, if financial support is provided through VGF, the government could invite bids on either the tariff offered by the project or the amount of funding.
In the case of contract for difference, if a developer has bid a certain tariff for availing of the funding, it will sell the power on the exchanges at that rate with a certain permissible variation, and any difference may be settled through the corpus and vice versa, the person said.
To ensure viability of the project, a comparison between the capital costs, cycle efficiencies for battery energy storage systems and green hydrogen as storage is being prepared, another person said.
Power and renewable energy minister RK Singh had, in September, said a pilot project aimed at generating 100 MW of round-the-clock power using green hydrogen as storage was in the works. The minister had said that the cost of such power was estimated at around INR 6 per unit.
