Sources say that India's Assam State has halted its green hydrogen policy, a setback for investors.
Government and industry sources confirmed that Assam, a state in northeast India, has halted its green hydrogen policy, shocking investors who were already suffering from a reduction of incentives for clean energy project.
The largest state in the northeast has tried to attract large investments to a region which has lagged far behind the rest of the country when it comes to renewable energy adoption. It has offered financial incentives and exemptions for electricity.
Four sources familiar with the matter said that energy firms such as NTPC Green and Larsen And Toubro in Singapore, Sembcorp in Abu Dhabi, and NTPC Green in Assam have expressed an initial interest in bidding on green hydrogen projects.
Three sources claim that Assam's decision halting the green hydrogen policy shocked some companies and forced them to recalculate potential returns on investment worth millions of dollars.
A government official revealed that the state is currently working on a draft policy which should be ready by the end this month.
Emails seeking comments were not responded to by the companies. Officials and sources from the industry declined to identify themselves as they were not authorized to comment on this matter.
Green hydrogen can be produced by using clean electricity. It is considered a tool for decarbonisation to limit global warming.
Krishna Kumar Dwivedi said, without going into detail, that "every state is constantly revising their policy and what incentives they can offer based on demand and requirements."
He didn't give any details as to why Assam was holding back or why the incentives previously announced were reduced.
In February, the clean energy policy for the first time was announced. Assam reduced its transmission subsidies in June and increased the bank guarantees for solar policy.
Debabrat Ghosh is the head of India for Aurora Energy Research. He said that investors look for stability over the long term, even if policy design is not optimal.
A representative of a large Indian developer of renewables said that the absence in Assam renewable energy sources will force green hydrogen projects to depend on neighbouring states for electricity, increasing costs and reducing competition.
Without adequate transmission subsidies, electricity costs could be 10-15% higher. The official stated that Assam would fall behind states with competitive policies if such costs were not reduced. (Reporting and editing by Sonia Cheema; Sethuraman N R)
(source: Reuters)
