Extension of Transmission Fee Waiver for Green Hydrogen Plants in India

New Delhi: India is working towards becoming the most cost-effective producer of fuel by extending waived transmission fees for renewable power to Hydrogen manufacturing plants. Specifically, such waivers will now apply to Hydrogen plants that are commissioned before January 2031.

As a result, it is expected to decrease the cost of green Hydrogen by 20 percent. Previously, only initiatives launched before July 2025 were eligible for the 25-year waiver of transmission charges, but this new extension should make more green Hydrogen manufacturing projects eligible. The source wishes to remain anonymous since they are not authorised to address the media.

According to industry estimates, the construction of large-scale Hydrogen and Ammonia projects typically takes three to four years, making it unlikely that many will be operational by June 2025. However, India's ambitious goal is to produce green Hydrogen at the world's lowest rate, aiming for a cost of USD1-USD1.50 per kilogram, which is significant progress compared to the current rate of USD4-USD5/kg.

Companies such as Reliance Industries and Adani Enterprises are targeting to achieve this goal by 2030. Several other Indian organizations, including Larsen & Toubro, Indian Oil, NTPC, JSW Energy, ReNew Power, and Acme Solar, have also announced plans to produce green Hydrogen. According to experts in this field, renewable energy, including transmission, constitutes approximately 65% to 70% of the cost of generating green Hydrogen.

According to an official, inter-state transmission charges of power range between 1 and 2 rupees per unit. The cost of green Hydrogen is reduced by 60 Indian rupees (USD0.73) with every 1 rupee decrease in renewable energy costs. The ministry for new and renewable energy did not respond to an email seeking comment. For India's Hydrogen mission to succeed, investments worth 8 trillion Indian rupees (USD98 billion) are estimated to be required by 2030, along with 125 gigawatts of non-fossil-based generation capacity and new transmission lines.

India plans to offer incentives worth at least 10% of their costs to green Hydrogen producers under a USD2 billion scheme slated to commence before the end of June. During the G20 meetings, some developed nations recommended expanding the definition of green Hydrogen to include fuel generated from low-carbon energy, but the country is against this proposal.