Suruchi Kotoky and Ishaan Chopra
Background
The Approved List of Models and Manufacturers (“ALMM”) and the Revised List of Models and Manufacturers (“RLMM”) for solar modules and wind turbines, respectively, were introduced to bring standardisation and quality, while promoting the growth of domestic manufacturing and to make India a global manufacturing hub. While ALMM lists out the solar photovoltaic (PV) cells and modules that are approved for use in solar projects in India, RLMM provides the list of type and quality certified wind turbine models that are approved for installation in the country. Any developer or generator who wishes to establish a renewable energy project will have to buy solar PV cells and modules only from those who are listed in ALMM. This has helped to maintain the quality of the projects and brought a level playing field for all the OEMs.
However, at the same time, it has also created difficulties for the developers and generators. India is stepping up its manufacturing capabilities in PV cells and modules, however, present domestic supplies are way below the demand for PV cells and modules. To fill this gap, generators have to rely on imported PV cells and modules which are expensive and time consuming. Considering the net zero target by 2070 and other environmental challenges, the Government is encouraging alternate fuels, especially green hydrogen. To make it a popular fuel in the coming years, the Government has provided many incentives and concessions for the manufacturing of green hydrogen. The recent office memorandums issued by the Ministry of New and Renewable Energy (“MNRE”) are a step in this direction.
What is new?
In a landmark move to accelerate the growth of the green hydrogen energy sector, the MNRE has issued two[1][2] office memorandum dated May 27, 2024, exempting renewable energy plants located in Special Economic Zones (“SEZs”) or Export Oriented Units (“EOUs”) from mandatory sourcing of modules and turbines from the Government approved list of models and manufacturer i.e. ALMM and RLMM.
The exemption applies to renewable energy plants that are commissioned by December 31, 2030, and are supplying power exclusively for the production of green hydrogen and its derivatives, which are located within an SEZ or set up as EOU. These SEZs or EOUs can be in the same location or even different ones.
Impact
Marking a commendable stride towards fostering a clean and sustainable energy ecosystem, the Government’s initiative to relax regulations for eligible green hydrogen producers sends a strong signal that the Government is committed to supporting the growth of the green hydrogen sector.