Rajasthan, with its abundant renewable energy resources, is positioning itself as a prime destination for green hydrogen production. The state’s government is committed to harnessing these resources to achieve clean energy production targets and contribute to a sustainable future. To achieve this, the Rajasthan government has approved the draft of the ‘Rajasthan Green Hydrogen Policy-2023,’ which is designed to promote the generation of green hydrogen by prioritizing the use of renewable energy within the state.
Incentives for the Green Hydrogen Sector
The ‘Rajasthan Green Hydrogen Policy-2023’ offers a range of incentives to encourage the growth of the green hydrogen sector. These incentives include:
- 50% Rebate on Transmission and Distribution Charges: Green hydrogen projects with a capacity of 500 kilotons per annum are eligible for a 50% rebate on transmission and distribution charges for a period of ten years.
- Exemption from Surcharge: Green hydrogen procured from third parties will be exempt from additional and cross-subsidy surcharges for a decade.
- Priority in Land Allocation: The policy gives priority to land allocation for green hydrogen production.
- Subsidies for Research Centers: Companies establishing green hydrogen research centers can receive a 30% subsidy, up to ₹50 million (~$601,520).
- Freedom to Bank-Generated Electricity: Green hydrogen projects enjoy the freedom to bank-generated electricity.
- No Capacity Restrictions: There are no capacity restrictions on captive power projects.
- Waiver of Wheeling and Transmission Charges: Green hydrogen projects will benefit from a 100% waiver on wheeling and transmission charges.
- Reimbursement/Waiver of Banking Charges: Banking charges for green hydrogen projects will be reimbursed or waived for a duration of seven to ten years.
Sunrise Sector Recognition
The ‘Rajasthan Green Hydrogen Policy-2023 places the green hydrogen sector within the ‘Thrust Sector category of the Rajasthan Investment Promotion Scheme-2022. This recognition allows the sector to benefit from the Manufacturing Standard Package, enhancing its appeal to potential investors.
Investor Incentives
To attract investors, the policy offers several attractive provisions, including:
- Exemption in Transmission and Distribution Charges: Companies establishing 500 KTPA renewable energy plants on the state’s transmission system enjoy a 50% exemption in transmission and distribution charges for ten years.
- Research Center Grants: Investors focusing on research centers for green hydrogen production from treated or brackish water can receive a grant of up to 30% (maximum ₹5 crore).
- Facilities and Benefits: The policy encompasses various discounts, water availability assurances, and banking facilities under the Rajasthan Investment Promotion Scheme-2022 (RIPS-2022). Notably, there are no restrictions on the capacity of captive power plants, and the ban on power withdrawal during peak hours has been lifted under the new policy.
- Reimbursements and Waivers: Power plants in the green hydrogen sector will enjoy 100% reimbursement or waiver of wheeling and transmission charges. Banking charges for these power plants will also be reimbursed or waived for a duration of seven to ten years.
Public Input and Ambitious Targets
The Energy Department ensured public participation by soliciting suggestions from stakeholders during the drafting process, and these valuable recommendations have been incorporated into the policy. The state government has set an ambitious target of achieving 2000 KTPA energy production by 2030, with projects divided into four categories:
- Extraction of renewable energy through the power grid network.
- Production of renewable energy and hydrogen at a single location (700 KTPA).
- Round-the-clock generation of renewable energy through RTC power (800 KTPA).
- Residence of renewable energy through the RVPN network (500 KTPA).
The Green Hydrogen Revolution
Green hydrogen, an emerging sector in the realm of renewable energy, involves the production of hydrogen through the electrolysis of water using renewable energy sources. Hydrogen plays a pivotal role in industries such as refineries, steel plants, and ammonia production. Importantly, its manufacturing process is environmentally friendly.
It’s worth noting that the Central Government has already launched the National Green Hydrogen Policy-2022 and Mission, aiming to produce 5 MMT per annum of green hydrogen. With the ‘Rajasthan Green Hydrogen Policy-2023,’ the state is poised to make a significant contribution to this national endeavor, harnessing its renewable energy potential and fostering clean energy development.
In conclusion, Rajasthan’s commitment to green hydrogen not only paves the way for a sustainable and cleaner future but also provides ample opportunities for investors to participate in this burgeoning sector. As the state pushes for a greener and more sustainable energy landscape, the ‘Rajasthan Green Hydrogen Policy-2023’ is a promising step toward realizing these goals.