India Plans to Boost Renewable Energy Capacity

What’s in Today’s Article?

• Why in News?
• What is the MNRE’s Proposal?
• Background of the MNRE’s Proposal
• Significance of the MNRE’s Proposal
• Importance of China for India

Why in News?

• The Ministry of New and Renewable Energy (MNRE) has proposed an exemption for green hydrogen developers from adhering to its list of authorised manufacturers to enable them to import solar PV modules and wind turbine models from China.
• Additionally, MNRE also proposed an exemption on duties and taxes up till 2035 on equipment imports for setting up export-oriented green hydrogen projects.

What is the MNRE’s Proposal?

• The MNRE has proposed examining the possibility of exempting green hydrogen developers from its list of authorised manufacturers.
• This will allow them to import solar PV modules and wind turbine models from China in order to make exports of green hydrogen competitive.
• Currently, MNRE’s Approved List of Models and Manufacturers (ALMM) and Revised List of Models and Manufacturers (RLLM) do not include Chinese manufacturers.

Background of the MNRE’s Proposal

• Following the Galwan Valley skirmishes in 2020, the Indian government issued orders to clamp down on participation of Chinese vendors in public procurement.
  • Recently, the Indian procurement portal GeM announced the removal of hundreds of Chinese vendors over the past three years.
• The government’s sidelining of Chinese manufacturers comes at a time when energy companies are doubling down on mass producing green hydrogen, for which renewable energy equipment and electrolysers are key.
  • This is part of the MNRE’s policy to boost domestic manufacturing of renewable energy equipment.
• While central PSUs may not be able to import electrolysis machinery from China, it has not stopped others from doing so.
  • In FY23, India imported machines and apparatus for electro-plating, electrolysis/electrophoresis worth $45.61 million, a 40% jump from the previous fiscal year.

Significance of the MNRE’s Proposal

• Importing solar PV modules from China will help with supply and in making Indian exports of green hydrogen competitive at the global level.
• This will enable central PSUs like Indian Oil Corporation Ltd and NTPC Ltd, which have announced green hydrogen projects, to procure equipment manufactured in China.
• This will make India competitive in producing green hydrogen and achieve the targets set out in the National Green Hydrogen Mission.

Importance of China for India

• Besides, to meet its green hydrogen targets by 2030, India needs to add an additional renewable energy capacity of 125 gigawatt, nearly 3/4th of its current total capacity of 179 gigawatt.
• India has earmarked a total of Rs 4,400 crore for the Production Linked Incentive (PLI) scheme for boosting domestic manufacturing of electrolysers under MNRE’s flagship Strategic Interventions for Green Hydrogen (SIGHT) programme.
  • However, it could take years before India reaches some degree of self-sufficiency in electrolyser manufacturing capacity.
  • While India plans to install 60 gigawatt of electrolysis capacity to meet its 2030 target of producing 5 million metric tonnes of green hydrogen, the domestic industry is still in nascent stages.
• China is a global hub for manufacturing electrolysers, with a 40% of global manufacturing capacity for electrolysers.
• Even as imports of Chinese solar PV modules to India fell by 76% during the first half of 2023 compared to the first half of 2022, they continue to be cheaper than those made in India.

Q1) What is the National Green Hydrogen Mission?

The National Green Hydrogen Mission aims to accelerate the deployment of Green Hydrogen as a clean energy source to support the development of supply chains that can efficiently transport and distribute hydrogen.

Q2) What is Green Hydrogen?

Green hydrogen is hydrogen produced by the electrolysis of water, using renewable electricity. Production of green hydrogen causes significantly lower GHG emissions than production of grey hydrogen, which is derived from fossil fuels without carbon capture.

Source: Govt plans long-term exemption for green hydrogen projects from its manufacturers shortlist for solar panels