The Ministry of New and Renewable Energy (MNRE) has projected a need for investment worth Rs. 8 lakh crores, including Rs. 5.5 lakh crores of debt-based funding, for Green Hydrogen production disaggregated over the next 7 years.

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MNRE Secretary Bhupinder Singh Bhalla said that the ministry is in talks with the DFS (Department of Financial Services) and IRDAI (Insurance Regulatory and Development Authority of India) to engage the private sector and explore funding avenues behind the traditional banking system.

He said that the money market, bond market and international agencies can be looked at for financing on a low-cost basis. Stating that the financing will be largely looked after by the private sector as it is setting up most of the Green Hydrogen projects, he informed that 48 projects for Green Hydrogen production have already been announced, which totals to 3.5 million metric tonnes (MMT) of Green Hydrogen production per annum.

Terming incentive schemes as the biggest component of PLI schemes for Green Hydrogen with a sub-allocation of Rs. 17,500 crores, Bhalla said that the scheme for electrolyser manufacturing is being rolled out on 28th June while the scheme for the demand aggregation model for Green Hydrogen will also be released shortly.

Describing the models for Green Hydrogen production, he said that while the 1st model allows anyone to bid, the 2nd is the demand aggregation model where Green Hydrogen will be produced as per the needs expressed by the Ministry of Chemicals & Fertilizers and the Ministry of Petroleum & Natural Gas.

Despite a focus on Green Hydrogen exports, he stressed on the importance of Green Hydrogen's local demand creation to decarbonise the hard to abate sectors like fertilisers and petroleum refining, indicating that incentives will also be provided to Green Hydrogen suppliers for demand aggregation in such sectors.

With 10 litres of filtered water needed to produce 1 kg Green Hydrogen, he dismissed concerns over wastage of water in production of Green Hydrogen, stating that production of 5 MMT Green hydrogen will need only as much water as a 5,000-8,000 MW thermal power plant.