New Delhi: Union Minister for Power and New & Renewable Energy RK Singh has said that the government is considering allowing the accrual of carbon credits for green hydrogen and green ammonia which is exported from India. Speaking at the Special Ministerial Session of the Fourth International Conference & Exhibition on Clean Energy in New Delhi on September 15, the minister told the industry that the basic legal framework for carbon market has been formulated. “With this, the industry will have yet another advantage, which will make the Indian industry totally competitive,” Singh said.
Under the Energy Conservation (Amendment) Act, 2022, the government has permitted the generation of carbon credits by public and private sector entities in India with the aim of reducing emissions. The carbon credit certificates will be domestically tradeable between companies and individuals which will set up a compliance market. However, India is also considering export of carbon credits to buyers of green hydrogen and green ammonia. The move will bring in investments into India’s renewable energy sector and will also ensure offtake.
Commenting on India’s ambitious plans for Green Hydrogen, Singh said that since India will be one of the cheapest producers of Green Hydrogen in the world, Green Hydrogen would become a viable energy storage alternative. “Round-the-clock renewable energy will cost just about Rs 6 per unit if green hydrogen is used for storage,” said the minister.
“Green hydrogen is cheaper than gas and battery energy storage systems. We have come up with a pilot bid for about 100 MW which we hope will establish the benchmark. Once we are able to use green hydrogen for our energy requirements, all supply chain issues such as availability of lithium-ion batteries will be resolved. We will make green hydrogen and use it as storage. The average price of power in the energy exchange has recently been Rs 8 per unit, so if our cost for round-the-clock renewable energy comes to Rs 6 per unit, we are in business. That is what the future is: renewables. The future is here, not far away,” said Singh.
The minister informed that 5.8 million tons of green hydrogen at various stages of capacity is already being set up under the National Green Hydrogen Mission. “We will be the biggest exporter since our green hydrogen and green ammonia cost is going to be the lowest in the world. And we will come up with another bid for grid-scale storage. All that you have to do is to take advantage of the growing demand. Future Renewable Energy Purchase Obligations are going to be issued under the revised Energy Conservation Act. If any obligated entity falls short, they will have to pay a huge penalty.”
The minister said that the renewable energy industry of India is now world-class, consisting of majors who can compete anywhere. Singh told the industry that the government has made sure that it has opened the paths for the growth of the industry. “We have been leading with policy papers, rules and regulations, opening new doors. We came with Green Open Access Rules, where we have given the right for anybody to set up capacity anywhere and transfer it to wherever they want. I have written to all industry captains to switch over from thermal to renewables, this shift will also bring down the price of energy,” he said.
Speaking of the rapidly-growing energy demand, the minister said that the energy demand of the country will continue to grow rapidly since our economy is growing fast. “We need energy demand as fast as possible to meet this demand. We will make the electricity required for our growth. If our price for round-the-clock renewable energy is anything to go by, then we will not have to go the thermal way, we will adopt the renewable path. About 42 percent of our capacity is from renewable sources already.”
The minister pointed out that India is emerging as a manufacturing powerhouse of renewable energy. “Around 88,000 MW renewable energy capacity is under construction and our plan is to add 50,000 MW of renewable energy capacity every year. We are already emerging as an exporter. The world will come to rely on us more and more. So, all those who are setting up capacity have made a good bet. At the same time, we need to keep ourselves at the leading edge of technology,” said Singh. The minister added that India is going to emerge as the biggest exporter of solar cells and modules and that more grid capacity is being added.
The minister said that more and more people are going to come and invest in the renewable energy sector in the country. “UAE wants to make investment here, since they see the future here. Getting investments for green transition is not an issue, investment is coming since we have de-risked the system and made the whole system transparent. Every generator’s power bills are totally up-to-date. Legacy dues of discoms have been reduced to less than half of what they were, and this too will be wiped out in the next 2–3 years. Every genco is now profitable. AT&C losses have come down and the system is totally viable now. Everything has been made conditional on prudential norms,” said the minister.
The minister assured the industry that this is an era of huge growth for energy. “I believe all of you are fully confident and capable of the huge opportunities lying there for you. We want to Make in India and manufacture in India. But if you are not competitive and up-to-date, you will not succeed. I want all of you to be world-scale,” said the minister.