India will hold auctions for green Hydrogen in 3-4 months: RK Singh

  • Mandatory Hydrogen purchase obligations will be spelled out for fertiliser units, oil refineries and steel units for the initial years, said the minister

  • Electricity demand would help the country in adding green energy to its portfolio without the need to retire coal-based plants, said Singh

New Delhi: Power Minister RK Singh has said that India will conduct auctions for green Hydrogen in the next 3-4 months. Speaking at the launch of the ‘Go Electric’ campaign on Friday, Singh stressed that coal would continue to play an important role in fulfilling India’s growing energy demand along with green energy. “Electricity demand would help the country in adding green energy to its portfolio without the need to retire coal-based plants,” said Singh.

Bidding framework for Hydrogen auctions being worked out: Singh

Elaborating on the plan to hold auctions for green Hydrogen, Singh said that the Power Ministry has been holding discussions with the ministries of oil and gas, fertiliser and steel and is in the process of working out a bidding framework. The minister said that discussions have been held for spelling out mandatory Hydrogen purchase obligations for fertiliser units, oil refineries and steel units for the initial years.

“We import ammonia. Suppose we have a mandate like to begin with 10 percent of ammonia which fertiliser units are importing will be replaced by green ammonia made in India. We have put it to the Ministry of Petroleum that you import natural gas and extract hydrogen. Suppose we put a mandate to replace 10 percent of the hydrogen which is used for refining with green hydrogen made in India,” he said. He added that if a minimum of 10 percent green Hydrogen purchase obligation is imposed on these industries, the fuel will become competitive in three years.

“You have to have an obligation to buy made in India green hydrogen which may be slightly more expensive. Whatever it is, we need to begin. It depends on the bid. In fact, it may turn out to be not more expensive at all,” he said.

‘Will close thermal plants when per capita energy consumption goes up’

While noting that the average increase in energy demand from October 2020 till January 2021 was 10.5 percent, Singh said that the increase in demand for power will give India space to add renewable energy without retiring existing coal-fired power plants. “And we see that increase continuing to happen. In fact the rate of increase is going to be faster. Growth has happened, despite the fact that large parts of our economy, the commercial sector is actually not fully running on all cylinders. When the rest of the economy kicks in, the rate of growth of our energy demand will increase. Therefore, it gives us space to add renewable energy without having to retire our existing coal-fired plants,” he said.

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Commenting on India’s energy transition strategy, Singh said that countries world over are worried about environmental degradation and the pressure to reduce emission is growing. “Currently our energy consumption is about one third of the world average, per capita energy consumption is about one third of the world average. So if any country asks when are you closing your coal plants, I say wait till the per capita energy consumption goes up to the world average then we will talk about it. The fact is, the pace of our energy transition is the fastest in the world,” said the minister.

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