11

2024

-

06

Indian government to buy half a million tonnes of green hydrogen-based ammonia

Author:

Hydrogeninsight


 

State-owned SECI opens an auction to purchase NH3 on ten-year contracts for use in fertiliser production

 

The government-owned Solar Energy Corporation of India (SECI) has launched a tender for ten-year contracts in which it will purchase 539,000 tonnes a year of green hydrogen-derived ammonia, to be split across eleven projects with delivery points across the country.

 

While a ceiling price has not been set, SECI plans to run a reverse auction, where sellers win if their bid is the lowest possible price.

 

However, auction documents use example prices in the range of 80.08-86.15 rupees ($0.96-$1.03) per kilogram of ammonia, or $960-1,030 per tonne.

 

This would suggest a significant premium over grey NH3, as the most recent average prices listed by according to S&P Global Commodity Insights range from $303.33-475.71 per tonne, depending on where the chemical has been produced and shipped from.

 

While green ammonia producers are eligible to claim carbon credits, the auction rules stipulate that they must quote the price of NH3 without these discounts. Similarly, bidders cannot have also won subsidies on green hydrogen production capacity for the ammonia plant.

 

However, winning bids will also come with a three-year subsidy worth a maximum of 8.82 rupees per kilogram of ammonia in the first year — equivalent to the government’s existing subsidy for green hydrogen production.

 

The auction will also be split geographically, with delivery points to existing fertiliser plants along India’s east and west coasts (see map).

 

 

 

 

SECI notes that if bidders choose not to produce ammonia in co-location with the delivery point, they will have to factor in transportation costs to their price of supply.

 

The agency also requires that successful bidders begin to supply all of the capacity they had quoted within three years of signing the supply contract, although prior to this, it does allow for deliveries or sales to third parties “solely at the risk and cost” of the green ammonia producer.

 

Projects must also be fully commissioned a year in advance of the start of supply, and meet each specific delivery point’s requirements for ammonia quality.

 

The auction allows for a single company to bid for all eleven projects.

 

Source:Hydrogeninsight

Hot News

FuelCellChina Interviews