WORLD HYDROGEN: India’s Kerala to unveil renewable hydrogen policy by year-end with cost targets

Kerala is set to release its renewable hydrogen policy by the end of 2025, targeting production costs of the fuel below Rupee 200/kg (around $2.25/kg) with the help of incentives to position the coastal Indian state as a key player in energy transition, a state official said Sept. 24.

India's Rupee 197.44 billion National Green Hydrogen Mission encourages states to develop renewable hydrogen policies aligned with the central mission, and Kerala, with its Rupee 1.33 billion Hydrogen Valley Innovation Cluster, exemplifies the state's participation.

"The state has committed to a full renewable energy transition by 2040 and carbon neutrality by 2050, earlier than India's target of 2070," Harshil R Meena, CEO of the Agency for Non-conventional Energy and Rural Technology in the Kerala government, told Platts, a part of S&P Global Energy, ahead of the World Hydrogen India summit, Sept. 25-26.

"Kerala, with its long coastline, seafood processing hubs, and vulnerability to climate change, is well-positioned to capture opportunities in renewable energy innovation like offshore wind, wave, tidal, solar, and green hydrogen," Meena added.

Under Kerala's Hydrogen Valley Innovation Cluster, which takes part funding from NGHM, the state is initially targeting renewable hydrogen production of 197 metric tons per year, Meena, who will be responsible for implementing the program, said.

"As per the Detailed Project Report, there are seven work plans covering hydrogen production, storage, and consumption in mobility, city gas, and power generation applications," Meena said, adding that the work plans are already identified and approved by the Department of Science and Technology.

The Hydrogen Valley Innovation Cluster aims at establishing pilot projects for renewable hydrogen production, storage, distribution, end uses, and to establish the common basic infrastructure, he said.

String of incentives

Meena said renewable hydrogen developers will be offered a 50% waiver on Wheeling Charges and another 50% waiver on Intra-state Transmission Charges for renewable energy for 10 years, as part of the state's incentives.

Developers will also get 100% waiver on electricity duty and cross-subsidy for renewable energy for 10 years, he added. A Rupee 500 million subsidy would be in store for the entity to set up the first electrolyzer, among other incentives, he said.

Energy Hydrogen Production Assets database shows that Kerala has nine large renewable hydrogen projects, with a combined capacity projected at around 412,292 mt/year.

Kerala offers two major international seaports -- Cochin and Vizhinjam -- close to international shipping lines, which will support the renewable hydrogen and ammonia projects, Meena added.

Key projects include Vizhinjam Adani Port Green Ammonia Export Project, Cochin Port Authority Pilot, Cochin Airport Hydrogen project and Kerala Green H2 project, the database shows.

Platts, part of Energy, last assessed Oman hydrogen produced via alkaline electrolysis, including capital expenditures, at $4.96/kg on Sept. 23, unchanged from a month earlier.

Platts assessed Japan hydrogen produced via alkaline electrolysis, including capex, at $4.16/kg, down 28.3% from a month ago.

Proposals for hubs

Several companies have approached the Kerala government and submitted investment proposals to establish renewable ammonia plants around Vizhinjam and Cochin Port, with a combined green ammonia production capacity of 1.7 million mt/year, the official said.

The proposals received include those from ReNew Power, Leap Green Energy and HLC Green Energy, he said. The Kochi Green Hydrogen Valley Roadmap was developed by MEC Intelligence in collaboration with the Indo-German Energy Forum.

Initial discussions with investors and the Cochin Port Authority have begun to explore opportunities for renewable ammonia and bunkering projects, he added.

"Among these players, BPCL is in the most advanced stages," Meena said about the state-run refiner. "BPCL has set a net zero target for 2040 and accordingly, it is expanding its green energy initiatives."

In July 2024, BPCL floated a tender for supply of 5,000 mt/year renewable hydrogen to its Mumbai refinery/Kochi refinery/Bina refinery, Meena said outlining the refiner's initiatives.

BPCL is already a consortium partner of ANERT and has commissioned the Hydrogen Refueling System at the CIAL Airport which is awaiting the final clearance to commence operations, he added.