The Indian Oil Corporation (IOCL) has, for the second time, cancelled its tender for the construction of India’s first green hydrogen plant at its Panipat refinery. The state-owned energy giant axed the project after having received just two bids, recent reports said.
This development was being watched closely by India as it wants to emerge as a global green hydrogen production hub. The tender was envisaged as a critical step to arrive at a market price for this clean fuel. The only two bidders for the tender were GH4India—a joint venture between IOCL, ReNew Power, and Larsen & Toubro—and Neometrix Engineering, based in Noida.
Industry sources said the turn of events indicated tender terms that favored GH4India; it therefore faced charges of bias and legal challenge, which eventually led IOCL to cancel the tender.
The Panipat project was designed as a 10,000-tonne per annum green hydrogen production facility with a 75-MW electrolyser. The project was expected to cost around $400 million. The project is ambitious and is in line with the nationwide policy framed to scale production of green hydrogen and reduce the carbon footprint of the country.
The fact that repeated failures have been made to attract enough interest in the tender only goes to show the challenges India faces in developing a competitive green hydrogen industry. Prospective bidders have attested to weaknesses in the tender’s terms and conditions and on the nature of the investment climate. It must respond to that to make the investment climate more favorable and secure future successes.
India already boasts ambitious clean energy targets, with the development of a green hydrogen industry as a key part of these plans. The challenges that the Panipat process has encountered set the tone that more needs to be done to foster participation by more companies and further a competitive market”.
In such cases of cancelled tenders, clear, transparent, and fair guidelines, backed by friendly policies and incentives, would possibly attract investment and even create competition. Now, with India working to position itself at the helm of green hydrogen, these are the challenges to be looked at while developing an environment for sustainable development.
In other words, the repeated stumbling of the Panipat green hydrogen plant project demonstrates a gargantuan task that lies ahead for India to realize its aspirations in clean energy. On that account, the way forward must entail collaboration between the government and the industry players in taming the flaws of the tender process and allaying the fears of the investor to have a supportive framework that can propel the development of the green hydrogen industry in India.
Source:
Reports on Indian Oil Corporation (IOCL) and industry sources.