By Manish Gupta
Power and renewable energy minister RK Singh on Thursday accused advanced economies of creating barriers in green hydrogen by providing liberal subsidies, which are even equal to the cost of production, to prevent India from exporting the benign fuel to them.
“The cost of making green hydrogen will be around $3, and the subsidy being given by one country is $3. That means they are inviting people to make green hydrogen there and they will pay for the entire cost,” Singh said at a CII event, without naming the country.
A ten-year tax credit worth up to $3 per kilogram of “clean hydrogen” was approved by the US House of Representatives in November 2021.
The minister said that the developed world, which has been vocal about the benefits of free market, are creating huge barriers without any hesitation. He said that he never came across a barrier as large as this one.
“Of course, that country has the advantage that it can print its money and rest of the world subscribes to it because rest of the world have reserves in that. I also see this barrier mentality in Europe,” the power minister said.
But this is the world India will have to negotiate, he said, adding that there is no right or wrong, and if anyone lectures on how something is morally wrong, one has to just wait for circumstances to change and see them do an about-turn.
Claiming that India will achieve 65% of its installed capacity in non-fossils by 2030 instead of the set target of 45% with the hope that storage will become viable by then, Singh said India will manufacture and add storage on its own.
The government wants to promote ‘Make in India’ and has announced two production linked incentive (PLI) schemes for making solar cells and solar modules from polysilicon upwards. A lot of capacity is coming up, he said.
However, he warned the solar and wind equipment makers against profiteering. When the government is protecting them with both tariff and non-tariff barriers, they should not export all their products for personal profit, he said.
Singh said that he is considering mandating at least 50% of products to be sold in India, but he is not completely inclined as he wants capacity to expand.
“If this continues in the wind sector, I will do away with the barriers that protects them. Then people will be able to go out and buy wind mills and generators of 6 MW capacity, compared to what we have of 2 MW here,” he warned.
Further, the minister warned the industry against sitting on the bids they won to add capacity in the renewable sector but are apparently waiting for favourable rates or profits to reach a level of 25%-30% before executing the projects.
“We’ll start cracking down on them. We are changing the bidding documents. We are going to provide that if you fail to meet your scheduled commercial operation date (SCOD) once, you will not be able to bid for one year, and when you fail a second time, you will not be able to bid for five years,” Singh said, adding people are sitting on almost 50,000 MW capacity.