India’s Green Hydrogen Push Garners Interest, But Needs Improvement to Thrive: Report

Report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics finds strong response from domestic giants, but highlights need for improvements to attract startups, global players and ensure domestic market viability.

India’s $2.1 billion initiative to become a global leader in green hydrogen production has attracted significant interest from large domestic companies, but the program can be further enhanced to attract startups and international players, according to a joint report by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research & Analytics.

The report found that large Indian corporations actively participated in tenders issued for both electrolyzer manufacturing and green hydrogen production under the government’s Strategic Interventions for Green Hydrogen Transition (SIGHT) program. The Solar Energy Corporation of India (SECI), managing the SIGHT program, received bids exceeding the offered capacity for both tenders.

“The SIGHT program aims to leverage India’s advantage in low-cost renewable energy to achieve competitive domestic electrolyzer manufacturing and reduce green hydrogen production costs. The program has received an enthusiastic response from the industry,” said Vibhuti Garg, a report co-author and Director for South Asia at IEEFA.

The report suggests improvements to attract startups, compete globally, and establish a robust supply chain to ensure the industry’s long-term viability. A successful program could benefit various sectors, including agriculture, transportation, and manufacturing.

The SIGHT program offered incentives for companies to set up 1,500 megawatts (MW) of electrolyzer manufacturing capacity. SECI received bids for more than double the target capacity, with eight companies winning bids, including Reliance, John Cockerill, and Jindal India.

“Most winning participants had prior partnerships with electrolyzer technology companies, showcasing proactive strategies that contributed to their success,” said Jyoti Gulia, report co-author and founder of JMK Research & Analytics.

Similarly, bids for green hydrogen production surpassed the offered capacity by over 100,000 metric tonnes per annum (MTPA). Winners included Reliance, Greenko, ACME, and Adani New Industries. However, nearly 38,000 MTPA of biomass-based capacity remains unallocated.

“Despite the interest, using green hydrogen domestically remains uncertain due to challenges like infrastructure limitations, unclear regulations, and a lack of mandates for its use,” said Kapil Gupta, report co-author and Manager at JMK Research.

“Winners will likely target export markets due to domestic challenges and price concerns. The sector grapples with regulations, technology advancements, project delays, and the need for robust hydrogen infrastructure,” he added.

The report highlights that the SIGHT program’s short tenure (five years) and relatively low subsidies could hinder its ambitious goals.

“Government intervention in establishing standards, policies, and regulations and creating demand through offtake agreements is crucial for the domestic green hydrogen market’s development. Without such measures, India might remain a minor player globally,” said Charith Konda, report co-author and Energy Specialist at IEEFA.

The report recommends strengthening the regulatory framework, increasing funding for research & development, and adopting global standards for India’s hydrogen ecosystem.