India's Green Hydrogen Costs to Drop 40% with Govt Incentives

According to a report by the Institute for Energy Economics and Financial Analysis, the government's support and incentives are predicted to reduce the cost of green hydrogen in India, a nation that is making significant strides in the renewable energy sector, by up to 40%.

Key Insights:
• Green hydrogen costs in India may fall by up to 40%
• Incentives include lower GST, waived charges, and cheap renewable power
• Industry is positive, but policy refinements are needed for long-term growth

In India, the levelized price of green hydrogen is predicted to drop to between Rs 260 and Rs 310 per kilogram (USD 3 to 3.75 per kilogram).In addition to lowering distribution and transmission costs, lowering the GST rate for hydrogen to 5%, and waiving interstate transmission charges for open access, India offers hydrogen producers inexpensive renewable electricity. Additionally, according to the research, electrolyser manufacturers are expected to reduce overall system costs by 7–10% over the first five years, beginning in 2024. The average yearly realizable base incentive is Rs 2,960/kW (USD 36/kW).

"While the green hydrogen scheme is an important step for India, refinements are needed to promote long-term investment and project viability," says the report.

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According to the research, the industry has responded positively to India's green hydrogen initiative. It went on to say, though, that the plan needs to be adjusted to draw in new businesses, compete with multinational firms, build a supply chain, and secure demand in order to guarantee the long-term survival of the sector.

"If successful, it could help build India's green hydrogen industry with benefits for a range of sectors including agriculture, transport and manufacturing," the Institute for Energy Economics and Financial Analysis report added.