India's Numaligarh hydrogen tender ends at record-low Rupees 279/kg

India's renewable hydrogen market reached a new low in pricing on Feb. 12, as NeuEn Green Energy won Numaligarh Refinery Ltd.'s tender at Rupees 279/kg ($3.08/kg) excluding taxes, a 10% decline from the opening bid of Jan. 19, according to market sources with knowledge of the matter.

The bidding was highly competitive, with nine bidders participating in the reverse auction, and two submitted final bids of Rupees 280/kg and Rupees 281/kg, very close to NeuEn's winning bid of Rupees 279/kg.

The final price, determined after a reverse auction, was Rupees 30/kg below Renew's January opening bid of Rupees 309/kg and represents a 15% discount to the Rupees 328/kg price established in Bharat Petroleum's July tender. The aggressive pricing suggests suppliers are prioritizing market share over margins.

The bidding was very competitive with nine bidders participating in the reverse auction, and two of them submitted their final bids at Rupees 280/kg and Rupees 281/kg, very close to NeuEn's winning bid of Rupees 279/kg. However, the fourth bid was at Rupees 302/kg.

After seeing the opening bid from Renew at Rupees 309/kg, several market participants indicatively valued the Numaligarh refinery tender between Rupees 275-290/kg. However, some bidders said that the bid is highly competitive, making it difficult to lower the price further.

Platts, part of S&P Global Energy, last assessed its India renewable hydrogen term contract price at Rupees 300/kg on Feb. 5, indicating the market had anticipated lower pricing from the NRL tender process.

"$3.08/kg is one of the lowest offers for renewable hydrogen globally, with European offers tending to be at least twice as high as this level. This also backs up the results of the Solar Energy Corporation of India tender last year, with renewable ammonia awards being as low as $570/mt," said Matthew Hodgkinson, senior principal analyst for hydrogen and low-carbon gas at S&P Global Energy Horizons.

Hodgkinson added that these low prices need to be backed up by projects reaching final investment decision and operating at these low costs. "$3.08/kg is a feasible production cost for renewable hydrogen at scale if the project secures favourable electrolyzer supply offers, and is fully optimised using hybrid wind and solar," he said.

NeuEn Green Energy is a 50-50 joint venture of Bharat Petroleum and Sembcorp. It will supply 10,000 mt/year of renewable hydrogen to the Assam-based refinery over 25 years on a build, own and operate basis. The contract represents one of India's largest long-term renewable hydrogen supply agreements to date and could influence pricing expectations for upcoming tenders from state-owned refiners.

Numaligarh Refinery and NeuEn Green Energy did not immediately respond to requests for comment.

Operational challenges persist

The competitive pricing comes despite significant operational challenges facing the project, particularly the refinery's location in India's Northeast region, where building renewable energy infrastructure remains a challenge. Market participants had expressed surprise at the low opening bids given these constraints, especially the absence of a state policy framework after Assam's government halted its hydrogen policy in 2025 before the bidding process.

The stalled state policy had included provisions for electricity duty waivers and capital cost subsidies that producers can no longer access, forcing them to absorb additional expenses. One bidder told Platts in January that the electricity duty of 42 paisa/kWh adds about Rupees 20/kg to hydrogen costs.

The reverse auction mechanism, which Numaligarh Refinery adopted in May following Indian Oil's approach, proved effective in driving prices below the Rupees 300/kg threshold that refineries have targeted to ensure commercial viability for industrial-scale renewable hydrogen adoption. The tender had attracted 10 bidders, including Renew, AM Green, Hygenco and previous tender winners Ocior Energy and L&T Energy Greentech.