UP approves green hydrogen policy, setting up of 800 MW thermal plants

The Uttar Pradesh government on Tuesday approved a green hydrogen policy, and a proposal for setting up two units of 800 MW in Anpara in collaboration with NTPC at a cost of Rs 8,624 crore.

The decisions were taken at a Cabinet meeting presided by Chief Minister Yogi Adityanath.

"So far, hydrogen production technology has relied on electricity or gas, known as gray hydrogen. A significant effort is now underway to transition from gray hydrogen to green hydrogen. The policy outlines an ambitious goal to produce one million metric tonne of green hydrogen annually within the next 4 years, by 2028," an official release quoted Energy Minister AK Sharma as saying.

The green hydrogen policy has been set for 5 years. Industries establishing themselves within this timeframe will receive subsidies and other incentives totalling Rs 5,045 crore.

"These industries will be eligible for subsidies ranging from 10 to 30 per cent on capital expenditure, with the first five industries enjoying discounts of up to 40 per cent. Additionally, the policy includes provisions for energy banking, offering a 100 per cent rebate on intrastate electricity charges and billing and transmission charges for interstate transactions," Sharma said.

Moreover, there is a provision for a 100 per cent exemption in electricity duty, he added.

The Cabinet also approved a proposal for setting up two units of 800 MW at Anpara in Sonbhadra district in collaboration with NTPC at a cost of Rs 8,624 crore.

This initiative will advance through a 50-50 partnership between the state government and NTPC.

The financial structure involves 30 per cent equity shared between the state government and NTPC, while the remaining 70 per cent will be financed through loans. The coal mine will be acquired from NCL (Northern Coalfields Ltd), which is located nearby, paving way for production of cost-effective electricity, Sharma said.

Two MoUs were signed with NTPC in 2023 Global Investors Summit. Of these, the first proposal to set up two 800 MW units in Obra D was approved by the Cabinet last year itself, while the second proposal to establish two 800 MW plants got the nod from the Cabinet on Tuesday.