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India allocates full $513mn electrolyser subsidy budget

  • Market: Hydrogen
  • 22/01/25

India has allocated its full budget of Rs 44.4bn ($513.7mn) to subsidise up to 3GW/yr of electrolyser manufacturing capacity across two 1.5GW/yr tender rounds and will hold no further rounds, officials told Argus.

Government officials confirmed that India's 2024 second round had allocated the Rs 22.2bn that remained after the first round.

The Rs44.4bn budget for electrolysers represented around a fifth of the Rs197.44bn ($2.4bn) that New Delhi has earmarked for its "national green hydrogen mission".

Both rounds offered support over five years, starting at Rs 4,440/kW in the first year, decreasing annually. Successful bidders will get up to Rs 14.8mn per MW/yr for all categories in both rounds. But the final amount that companies will get depends on their targets for "local value addition" (LVA) and electrolyser efficiency that Delhi called "specific energy consumption" (SEC). The government will check if companies comply with the requirements and could reduce the incentives if they do not, the official added.

The government had asked for minimum 40pc domestic components in the first year of subsidies, rising to 50pc in the second year, and 80pc by the fifth year in the case of alkaline electrolysers, with slightly lower thresholds for other technologies.

Winning firms generally placed bids with more ambitious pledges to use Indian-made components in their electrolysers,according to SECI data.

Renewables company Waree Energies, Matrix Gas and Renewables, Advait Infratech, and Newage Green Electro have committed to 90pc LVA for alkaline electrolysers starting from the first year itself. US-based Ohmium, in its bid, stated that it can maintain 80pc LVA for its proton exchange membrane (PEM) electrolysers consistently over all five years. Meanwhile, renewables firm GH2 Solar has proposed achieving 80pc LVA in the first year and increasing it to over 90pc from the second year onward.

Companies will also have to satisfy the government's SEC targets that measure the efficiency of electrolysers. The companies which prevailed in the tender were generally those promising more efficient technology. The government is keen to support the most efficient kit that should help to produce lower cost renewable hydrogen.


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