Green hydrogen slump delays electrolyser projects

Agencies Mumbai: Lack of demand for green hydrogen is forcing nearly half-a-dozen companies, including Reliance Electrolyser Manufacturing , Adani New Industries , Homi Hydrogen and John Cockerill Greenko Hydrogen Solutions, to defer the commissioning of their electrolyser manufacturing facilities to August 2027 from December 2026. Industry executives aware of the development said the ministry of new and renewable energy (MNRE) has agreed to extend the timeline allowing these companies to retain their eligibility for incentives under the production-linked incentive (PLI) scheme. RIL , John Cockerill Greenko Hydrogem , Advait Infratech , L&T Electrolyses and Adani New Industries did not respond to email queries. The ministry of new and renewable energy also did not reply to an email query. "Companies can commission their facilities any time until August 2027. Those which have orders can start the year immediately, while others can wait until they get orders," an industry executive said. Also Read | India records lowest-ever price for green hydrogen in tender He added that the revised arrangement allows manufacturers to start operations earlier if they have orders, or defer the formal commencement of their PLI incentive period until they secure demand. This is significant because the PLI scheme provides higher incentives in the initial years, and companies risk losing out on benefits if they begin the incentive period without adequate orders. Live Events "This flexibility will help keep the electrolyser manufacturers from incurring operating costs without sufficient production," said an industry executive, adding that several companies have already invested in land, buildings and equipment, while interest payments on loans taken to establish the facilities have either begun or are due. Industry estimates suggest that setting up an electrolyser manufacturing facility could involve capital expenditure of ₹50 crore to ₹100 crore, depending on land acquisition and other requirements. Manufacturers continue to bear financing costs even if they delay commissioning or production. However, the relaxation does not provide any immediate financial benefit to companies. Since the PLI scheme is linked to actual production, incentives will accrue only after manufacturers secure orders, produce electrolysers meeting the prescribed domestic value-addition and energy-consumption criteria, and supply and commission them for customer projects. Also Read | Gujarat emerges as key hub for green hydrogen, but large-scale projects remain at feasibility stage: S&P Global Although the government has awarded green ammonia projects under its green hydrogen programme, developers are yet to complete financial closure and place orders with electrolyser manufacturers, executives added. HomiHydrogen told ET it has sought an extension of two years for the full commissioning of the manufacturing facility. "The demand is very slow as compared to the expected demand from the 5 MMTPA green hydrogen production road map. But going ahead we see demand to pick up," the company said in an email response. The company has invested around Rs 100 crore in the technology development, land & building and plant & machinery so far. Reliance Electrolyser Manufacturing, owned by Reliance Industries , is understood to be targeting May 2027 for readiness of its facility. The company did not respond to an email query. Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on reliance ril ministry of new adani new industries electrolyser manufacturing Green Hydrogen hydrogem reliance electrolyser manufacturing reliance industries advait infratech (Catch all the Business News , Breaking News and Latest News Updates on The Economic Times .) Subscribe to The Economic Times Prime and read the ET ePaper online. ... more less (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on reliance ril ministry of new adani new industries electrolyser manufacturing Green Hydrogen hydrogem reliance electrolyser manufacturing reliance industries advait infratech (Catch all the Business News , Breaking News and Latest News Updates on The Economic Times .) Subscribe to The Economic Times Prime and read the ET ePaper online. ... more less