Assam halts green hydrogen policy: NTPC Green, L&T, others rethink investment plans
A big setback for those betting on Hydrogen as an alternate fuel play- Assam has put its flagship green hydrogen policy on hold, as per a report by Reuters citing government and industry sources. The move has surprised several investors who were already grappling with reduced incentives for clean energy projects in the state.
Assam, the largest state in northeastern India, had aimed to attract major investments in the green energy sector through financial incentives and waivers. However, the sudden pause in policy has forced companies to rethink their investment plans.
NTPC Green, L&T and others reconsider bidding
Reuters reports that companies like NTPC Green, Larsen & Toubro, Singapore-based Sembcorp, and Abu Dhabi’s Ocior had shown initial interest in bidding for green hydrogen projects in Assam. But the unexpected policy pause has made some of them reconsider their potential returns, sources told Reuters.
The state is now working on a new draft policy, which is expected by the end of this month, a government official told Reuters.
The companies did not respond to Reuters’ emails seeking comment. Industry officials also declined to be named as they are not authorised to speak publicly on the matter.
Policy flip-flop raises investor concerns
Green hydrogen is produced using clean electricity and is considered a key tool in reducing carbon emissions. Assam had first announced its clean energy policy in February this year.
In June, the state revised its solar policy—cutting transmission subsidies and raising bank guarantee requirements—leading to investor concerns about policy stability, according to Reuters.
“Every state keeps on revising its policy and what incentive it can give based on the demand and requirement,” said Krishna Kumar Dwivedi, principal secretary at Assam’s power department, to Reuters. However, he did not explain the reasons behind the latest changes or the rollback of earlier incentives.
Lack of local power sources a concern
Reuters highlights that experts believe Assam’s limited renewable energy sources make it dependent on neighbouring states for power, making green hydrogen production costly.
“Without adequate subsidies for transmission, power costs could be 10–15 per cent higher. Unless such costs are reduced, Assam will fall behind other states with more competitive policies,” an official from a major Indian renewable energy company told Reuters.
Debabrat Ghosh, head of India at Aurora Energy Research, told Reuters, “Investors look for long-term stability even if policies aren’t best designed.”
The state government’s next draft policy will be closely watched by industry players to see whether Assam can regain investor confidence and keep up in India’s clean energy race.
This article has been republished from The Financial Express.