India’s initiative to enter the green ammonia market is facing challenges as the first tender deadline was extended due to a high number of queries from bidders. The government has recognized the complexities of the industry and wants bidders to fully understand what is involved.
The Solar Energy Corporation of India (SECI) had invited bids for the production of 5.39 lakh metric tonnes of green ammonia annually under the National Green Hydrogen Mission (NGHM). The deadline was initially set for July 29 but was extended to September 30 due to the industry being new and bidders needing more time to study the requirements.
Green ammonia is produced by combining nitrogen from the air with hydrogen generated from renewable sources like wind or solar power. It has various uses such as in fertilizers, as a clean fuel for shipping, and as a means to store and transport hydrogen.
Challenges in the tender process include the complexity of finalizing project designs and the distribution of demand among various states, making transportation logistics difficult. The Request For Selection document outlines a strategy to incentivize green ammonia production in India, with producers needing to set up facilities at their own cost.
Commercial viability is a concern for producers due to the high initial investment required and uncertainties around technology improvements and cost reductions. The government is urged to bridge the cost gap between green and grey ammonia, provide subsidies, grants, and incentives for infrastructure development, and make policy changes to support the industry.
India has plans to establish significant green ammonia and hydrogen capacities in the next few years, with reports suggesting substantial growth. The government may consider extending financial support to boost production, although no official announcement has been made yet.