The government eased restrictions for solar and wind energy plants in SEZs, allowing them to buy equipment from non-approved manufacturers. This change will provide green H2 producers with cheaper machinery and duty benefits.
The Indian government announced on Tuesday that renewable energy plants situated in specific special economic zones are no longer required to purchase modules and turbines from approved lists of models and manufacturers. These zones primarily consist of export-oriented units dedicated to producing green hydrogen and its derivatives, all within the same zone.
According to the notification issued by the Ministry of New and Renewable Energy, the exemption will extend to renewable energy facilities scheduled for commissioning by December 2030, aimed at generating green hydrogen and its derivatives.
The government has confirmed that now green hydrogen producers will be able to buy cheaper equipment with duty benefits. It is a step that the industry has demanded for some time. However, members of the industry have stated that this exemption was anticipated and is in no way different from other SEZ benefits.
In 2021, the Centre mandated solar project developers to buy modules from an approved list. The updated list also includes certified wind turbine models approved for installation in the country. This was done to boost domestic manufacturing.
Previously, the government had allowed solar projects completed by March 31, 2024, to skip the rule of buying solar modules from that specific list of approval. Starting from this financial year, the government has reinstated limitations on the import of solar modules, reversing the relaxation granted previously due to inadequate domestic production capacity. The recent exemption is a move to help green hydrogen producers, as per the government.
However, this new regulation has sparked a political debate in the country amid elections. According to the Ministry of New and Renewable Energy Secretary’s statement in the Economic Times, the notification was issued with prior approval from the Election Commission.
The National Green Hydrogen Mission aims to develop a production capacity of 5 million metric tonnes of green hydrogen annually. It also seeks to add around 125 gigawatts of renewable energy capacity nationwide.
