SECI concludes the Rs 4440 crore Electrolyser Manufacturing Component of its SIGHT program

Can meet 52% of India’s 5 MMTPA green H2 production target in 2030

Indian government launched National Green Hydrogen Mission (NGHM) in January 2023, to position India as a global hub green hydrogen production, utilisation and export. The mission targets a green hydrogen production capacity of 5 million metric tonnes a year (MMTPA) and the addition of 125 gigawatts (GW) of renewable energy capacity by 2030, with the aim of abating 50MMTPA of greenhouse gas (GHG) emissions.

At the core of NGHM is Strategic Interventions for Green Hydrogen Production (SIGHT) programme by SECI, which aims to incentivise domestic manufacturing of electrolysers and green hydrogen. The financial outlay for both these components was set as Rs 4440 crore and Rs 13050 crore, respectively.

Under SIGHT programme, the SECI has issued three tenders until now, two for component-I (electrolyser manufacturing) and one for component-II (green hydrogen production). With the auction of second tender of 1500 MW for electrolyser manufacturing scheduled on 30th April 2024, SECI will conclude the component-I of its SIGHT programme.

The second tender for electrolyser manufacturing was largely similar to the first tender issued back in July 2023. However, based on learnings and feedback from the industry, SECI has slightly tweaked certain parameters. This second tender was prepared in line with recently issued “Scheme Guidelines for Implementation of SIGHT Programme: Component-I”.[1]

Table 1: Comparison of both tranches of SIGHT Component-1 (Electrolyser manufacturing)

Source: SECI

Introduction of a separate bucket with smaller net worth eligibility requirements in tranche-II will be a big boost to smaller manufacturing enterprises and start-ups looking to enter the electrolyser manufacturing sector. It is also evident from the compilation above that performance criteria as well as penalty in failure to match them is slightly stringent under tranche-II vis-à-vis tranche-I.

SECI has also modified its annual incentive calculation formula by replacing local value addition (LVA) with domestic value addition (DVA) in tranche-II. DVA measures how well a manufacturer can match its promised LVA values. This translates to much higher incentives for a manufacturer if he can fairly match its promised LVA.

Impact of SIGHT Component-I: With combined annual sales under both tranches of up to 3 GW during the scheme period of 5 years, India can have an electrolyser installed capacity of 15 GW by 2030. Assuming a specific energy consumption of 50 kWh per kg of H, this 15 GW capacity can cumulatively produce up to 2.62 MMTPA of green hydrogen in 2030, 52% of National target of 5 MMTPA.

After conclusion of SIGHT component-I, SECI will align its focus towards green hydrogen production i.e. component-II. SECI and MNRE should be commended for taking the initial steps to establish this new sector and introducing financially feasible interventions. Nevertheless, there is still a long way to go to ensure the success of NGHM and establish India’s green hydrogen’s capabilities.

[1] MNRE. Scheme guidelines for implementation of SIGHT: Component-I. March 2024