India is planning to subsidise 550,000 t/yr of ammonia production based on hydrogen made from renewable power or biomass over three years through a competitive tender.
Producers could get subsidies averaging up to 7,060 Indian rupees/t ($85/t) over the three-year support period, according to a government document seen by Argus (see bid ceilings table). But the companies submitting the lowest bids will be selected, meaning that actual support could stay well below the $85/t ceiling.
The tender design is similar to a recently-concluded procedure for subsiding hydrogen from renewable power and biomass, where most successful bids stayed well below the ceiling.
Ammonia production will only be eligible for subsidies if the hydrogen used to make it complies with India’s “National Green Hydrogen Standard”. This specifies that “green hydrogen” refers to hydrogen “produced using renewable energy including, but not limited to, production through electrolysis or conversion of biomass”, provided its well-to-gate emissions do not exceed 2kg of CO2 equivalent/kg. The 550,000 t/yr of ammonia that could be subsidised in the upcoming tender would correspond to just under 100,000 t/yr of hydrogen.
Subsidised ammonia will have to be “for supply” to consumers and cannot be traded.
Winners in the tender for hydrogen production cannot get subsidies for the same output if it is used to make ammonia. The support offered through the upcoming tender “can only be claimed for additional capacity, over and above the capacity” allocated in the concluded hydrogen round.
The government has so far not specified a maximum capacity that individual companies can bid for. But it noted that such a cap could still be set by the Solar Energy Corporation of India (SECI), which will organise the tender. Maximum supported capacity per company had been capped at 90,000 t/yr — out of the total 450,000 t/yr — in the hydrogen tender.
Overall government funds provided will not exceed Rs11.65bn ($140mn) even if all successful bids are in line with the ceiling. This leaves the available funds considerably lower than in the hydrogen auction through which the government allocated Rs30.6bn ($368mn) — despite average successful bids staying far below the ceiling.
The government has not specified the timeline for launching the tender process.
Delhi said it hopes the tender will help “maximise the production of green ammonia”, increase its cost-competitiveness with conventional production and “encourage large-scale utilisation”.
| Bids awarded for green H2 production tender | ||
| Bidder | Capacity (t/yr) | Average incentive (Rs/kg) |
| Bucket I- technology agnostic pathway | ||
| Reliance Green H2 and Green Chemicals | 90,000 | 18.9 |
| Acme Cleantech solutions | 90,000 | 30.0 |
| Greenko ZeroC | 90,000 | 30.0 |
| HHP Two | 75,000 | 25 |
| Welspun New Energy | 20,000 | 20.0 |
| Torrent Power | 18,000 | 29 |
| UPL | 10,000 | 0.0 |
| CESC Projects | 10,500 | 0.0 |
| JSW Neo Energy* | 6,500 | 34.7 |
| Bucket II- biomass-based pathway | ||
| BPCL | 2,000 | 30.0 |
| Total | 412,000 | |
| government sources | ||
| *JSW Neo Energy won 6,500 t/yr out of 10,000 t/yr capacity quoted | ||
| Bid ceilings in ammonia tender | ||
| Year | Maximum support in Rs/t | Maximum support in $/t |
| 1 | 8,820 | 106 |
| 2 | 7,060 | 85 |
| 3 | 5,300 | 64 |
| – Indian ministry of newand renewable energy | ||
SOURCE: By. Stefan Krumpelmann Argus Media group.
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