India unveils second auction for electrolyser production capacity, with more support earmarked for small-scale manufacturing




Manufacturers could receive up to $16m in payments for the first year of sales, as long as strict local content and performance requirements are met


India’s Ministry of New and Renewable Energy has published documents outlining its second auction for subsidies to support the buildout of another 1.5GW of electrolyser manufacturing capacity in the country.


Like the previous auction, the tender will include two broad “buckets” for indigenously-developed and any other technology, which will be supported over five years.


This second auction will offer subsidies to cover 1.1GW of any stack technology, 300MW of Indian-developed stacks, and 100MW of small-scale indigenously-developed electrolysers.


The last tranche is meant to support bids between 10MW and 30MW of capacity, while the first two categories have a minimum bid of 100MW and maximum of 300MW.


The second auction will also include strict requirements for energy consumption and quality.


As in the first auction, each electrolyser will need to meet a threshold of 56kWh or less electricity input per kilo of H2 produced, with a guaranteed life of at least 60,000 hours. The second auction also adds a requirement that as the end of an electrolyser’s life approaches, efficiency must not fall below 80%.


Bidders are also required to meet a minimum “local value addition”, which is calculated based on the sales value of the electrolysers compared to the cost of imported materials and services needed to make them.


This starts at 40% for alkaline equipment and 30% for any other kind of electrolyser in the first year, increasing by ten percentage points for the next four years of support.


The subsidy awarded per year starts at a base rate of 4,440 rupees ($53.54) per kilowatt of electrolyser capacity sold, decreasing to 3,700 rupees in the second year, 2,960 rupees in the third, 2,220 rupees in the fourth, and 1,480 rupees in the final year.


For example, if an electrolyser maker sold the maximum bid of 300MW in the first year of production, it could receive around 1.33bn rupees ($16m) in subsidies for that year.


However, manufacturers can be penalised if local value addition falls below what was quoted in their bids, with either only a partial subsidy award if less than 98% or even a wipeout of payments if less than 95% what they had promised.


Similarly, while bidders can receive a “performance quotient” that increases the chance of winning subsidies if their electrolysers require less than 50kWh/kgH2, if performance degrades by 2kWh/kgH2 from what was quoted or goes past the threshold of 56kWh/kgH2, the manufacturer will receive nothing for that year.


Bids are due to be submitted by 30 April, with evaluation from 3 May. Companies looking to participate will have to pay an “earnest money deposit” of 740,000 rupees per megawatt of capacity bid into the tender, as well as non-refundable bid processing and document fees for their application.


If successful, manufacturers will have to secure a bank guarantee of 1,480,000 rupees per megawatt awarded within 15 days of being notified of their subsidy award, as well as “success fees” of 30,000 rupees per megawatt plus 18% goods and services tax within 25 days.



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