Power Secretary Pankaj Agarwal said on Thursday that India in August 2024 raised the issue of single bidding zones in the European Union’s Renewable Energy Directive (RED II).
The issue relates to the European Union’s (EU) RED II, which, along with the delegated act (DA), defines a methodology for the source of renewable electricity used for the production of green hydrogen.
Industry concerns
Speaking at a session during the second day of the International Conference on Green Hydrogen, Agarwal pointed out that the Indian industry has been raising a few concerns in the recent past, particularly regarding the delegated legislation following the RED II.
“But, the issue of geographic and temporal correlation is something that has been bothering the industry in India. There has also been concern regarding the single bidding zone which our industry has been regularly flagging before us, and how exactly we can address it.
“Though we have given an adequate explanation to the (EU) delegation from the European Commission, which visited a month ago, and we are looking forward to further interactions with the officials, the Director General and the team from the European Commission for further clarification.”
The issue of additionality probably is more or less accepted, he added.
Additionality means that after a phase-in period, a RE plant cannot be much older than the electrolyser and cannot receive public support unless it is located in a low-carbon bidding zone.
Green criteria
Jorgo Chatzimarkakis, CEO of Hydrogen Europe, who represents the European hydrogen industry, explained that hydrogen is only defined ‘green’ in Europe if the electricity required for the electrolyser is produced in the same hour, which means that electricity from renewables is produced in the same hour as the electrolyzer splits water into hydrogen and oxygen.
Single bidding zones
Speaking on the issue of single bidding zones, he said Europe has a complex system of bidding zones, which stipulates that electricity is deemed green only if the electrolyser is in the same bidding zone where the electricity is being generated.
“The same rules apply for imports, including those from India, and this is what we need to stop. This straitjacket hinders hydrogen production in Europe. It hampers hydrogen production in India which is a key production country for Europe.
“And if I have one big wish for Ursula von der Leyen (President of the European Commission) because she said her first 100 days of her office will be devoted to (removing) unnecessary bureaucratic burden to cleantech. This should be a priority, and it would be good, Mr Secretary (Agrawal), if your government humbly hints that this issue is also detrimental to India. She will understand and address it.”
Considering India as a single bidding zone would allow green hydrogen producers to set up manufacturing facilities near ports and source renewable energy (RE) from generators in other parts of the country. This will lower production costs of green hydrogen, thereby bringing down import costs to Europe.
Government officials emphasise that India is one of the world’s largest synchronous interconnected electricity grids globally with a very low (as low as 0.06 per cent) quantum of electricity not being cleared in power exchanges, which is much lower than the congestion happening in European grids.
The green hydrogen requirement in Europe, which will be importing 10 million tonnes by 2030 besides producing a similar quantity, is being considered a very good export opportunity for India.