India allocates over $4bn for net zero goals in budget
The Indian government has allocated 350bn rupees ($4.28bn) for its 2070 net zero goal in its latest budget, covering areas like hydrogen, renewables and green mobility.
The allocation for the April 2023-March 2024 fiscal year is a priority capital investment towards India's energy transition, net zero objectives and energy security needs, finance minister Nirmala Sitharaman said in parliament on 1 February.
Sitharaman reiterated the government's aim to have green hydrogen production of 5mn t/yr by 2030, at an initial outlay of Rs197bn. The government had approved a national green hydrogen mission on 4 January, aiming to reduce the country's dependence on fossil fuels and turn India into a global hydrogen hub. The government later detailed plans for incentivising domestic hydrogen production and electrolyser manufacturing in a policy document on 13 January.
In the renewable segment, the government will support the setting up of 4,000MWh of battery energy storage and will come up with a detailed framework for the development of "pumped storage" projects in the country, Sitharaman said, but did not give more details.
The federal government has also promised support of Rs83bn out of a total investment of Rs207bn for an inter-state transmission system for evacuation and grid integration of 13GW of renewable energy from Ladakh, where state-controlled power company NTPC's renewables subsidiary NTPC REL plans to set up India's first green hydrogen mobility project.
The government has increased its allocation for faster adoption and manufacturing of electric vehicles to Rs51.7bn for 2023-24, a 78pc rise from Rs28.97bn in the previous fiscal year, in a bid to boost green mobility in the country. The finance minister also announced duty exemptions on imports of capital goods and machinery required for lithium-ion cells for batteries used in electric vehicles. The move could make electric vehicles cheaper in India and in turn boost their uptake.
The government also earmarked Rs100bn towards setting up of 200 compressed biogas (CBG) plants and 300 community and cluster-based biogas plants under its Galvanising Organic Bio-Agro Resources Dhan (Gobar-Dhan) scheme.
India had previously set a target to roll out 5,000 CBG production plants to reduce its reliance on energy imports and control pollution. It currently has 31 CBG plants in operation and about 100 retail outlets selling biogas.
"In due course, a 5pc CBG mandate will be introduced for all organisations marketing natural and biogas," Sitharaman said in her budget speech.
India imports about half of its natural gas requirements and is aiming to replace some of these imports with domestic biogas.
State-controlled firms Gail, IOC, HPCL and BPCL are some of the companies with existing plans for CBG plants.
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Derailment may interrupt SoCal renewable diesel
Derailment may interrupt SoCal renewable diesel
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G7 coal exit goal puts focus on Germany, Japan and US
G7 coal exit goal puts focus on Germany, Japan and US
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Larger EU H2 bank auction could still clear below €1/kg
Larger EU H2 bank auction could still clear below €1/kg
Hamburg, 1 May (Argus) — The EU will launch a second European hydrogen bank auction later this year, ramping up the budget from a pilot for which results were published on 30 April. A bigger budget will allow more projects to win subsidies, but developers might still have to bid at or below €1/kg to stand a chance of being successful. As a result of the pilot, the EU will subsidise seven renewable hydrogen projects in Spain, Portugal, Norway and Finland with a total €720mn ($768mn), to be disbursed as a fixed premium per kg produced over a 10-year period. The European Commission picked the projects that requested the least support and the auction cleared at €0.48/kg, far below the bid ceiling of €4.50/kg . A second auction later this year is slated to have a much larger budget of around €2.2bn. This could open the door for projects with less competitive bids, but developers may still have to bid for less than €1/kg, data released by the commission suggest. 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Such signposts were not available for the first round, other than from a Danish auction last year with similar parameters — which had indicated that winning bids in the hydrogen bank pilot were likely to stay well below €1/kg . The commission plans to tighten some of the eligibility criteria for the second round , which might prevent some projects from participating again. A draft document suggests winners of the second round would have to commission their plants within three years, down from five in the pilot. And developers would have to provide a completion guarantee equivalent to 10pc of the requested subsidies, up from 4pc. The second auction will also have a lower bid ceiling of €3.50/kg based on the draft, although this is highly unlikely to be tested by the successful submissions. Budget uncertainties While previous commission comments suggested a budget of around €2.2bn for the second round, the draft rules leave the exact funds open. The commission initially earmarked €800mn for the pilot and might top up the second round with the unused €80mn. It plans to set an unspecified slice of the budget aside exclusively for projects targeting offtake for maritime transport, adding a degree of complexity. Austria is planning to top up the second auction with €400mn , while others, such as Belgium , could follow suit. Moving the needle? While bids in the pilot auction came in well below the ceiling — and are bound to do so again in the second round — the funds will only be enough to support a fraction of the EU's 10mn t/yr renewable hydrogen production target by 2030. The pilot auction will subsidise 1.58mn t, or 158,000 t/yr, of production from the seven selected projects — assuming the support they secured will be enough to get them built as planned. If the next best projects from the pilot were to repeat their bids in a €2.2bn second round successfully, the round could support close to 300,000 t/yr. While this would lift subsidised output across both auctions to nearly 460,000 t/yr, it would still be less than 5pc of the 10mn t/yr target. Assuming developers that missed out in the first round shoot lower in the second and the volume-weighted average of successful bids is in line with the pilot's €0.45/kg, 480,000 t/yr could be subsidised. Together with the pilot, this would yield 640,000 t/yr, or just over 6pc of the EU's target, although extra funds from Germany, Austria and potentially others could lift this further. The EU hopes this initial operating support, combined with subsidies for capital expenses, infrastructure developments and demand-side initiatives, will be enough to kickstart the sector and other projects will follow even without hydrogen bank support. By Stefan Krumpelmann Renewable H2 projects selected in hydrogen bank pilot auction Project Coordinator Project location H2 output t/yr Electrolyser capacity MW Bid price €/kg Requested funding mn € eNRG Lahti Nordic Ren-Gas Finland 12,200 90 0.37 45.2 El Alamillo H2 Benbros Energy Spain 6,500 60 0.38 24.6 Grey2Green-II Petrogal Portugal 21,600 200 0.39 84.2 Hysencia Angus Spain 1,700 35 0.48 8.1 Skiga Skiga Norway 16,900 117 0.48 81.3 Catalina Renato PtX Spain 48,000 500 0.48 230.5 MP2X Madoqua Power2X Portugal 51,100 500 0.48 245.2 - European Commission Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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