Green Hydrogen Production Pathways for India

This report by RMI analyzes the techno-economic pathways for green hydrogen production in India, examining 17 states to evaluate the impact of national and subnational policies on production costs. It compares various project configurations—including stand-alone on-site, CTU-connected, and STU-connected projects—and highlights the critical role of transmission charge waivers and capital subsidies in achieving cost competitiveness against grey hydrogen.

• Subnational policy waivers and national mission support can reduce renewable power costs for green hydrogen projects by more than 90%. Odisha is the most competitive state in this regard, offering a unique additional waiver of ₹3/kWh ($0.036/kWh) that can slash landed power costs by up to 94%.
• Stand-alone on-site green hydrogen projects are highly cost-competitive, with production costs between $4.4/kg and $4.8/kg. Capital subsidies of 25% to 35% in states like Maharashtra, Uttar Pradesh, and Odisha can further reduce power costs by 20%–22%.
• Projects connected to the Inter-State Transmission System (ISTS) or Central Transmission Utility (CTU) are preferred by developers because they offer production prices 20% to 30% lower than non-subsidized projects connected to State Transmission Utilities (STU).
• Off-site projects require at least a 50% reduction in production costs to become competitive with grey hydrogen. Transmission charges can increase the landed cost of power to 1.5–2.5 times the base renewable energy generation cost.
• Increasing system utilization from 25% to 50% reduces the levelized cost of hydrogen (LCOH) by 22%, and a further 9% reduction occurs when increasing to 75%. However, gains beyond 75% utilization are marginal, at approximately 2%.
• The choice of storage significantly impacts project size: battery storage can enable up to 100% utilization but requires over 7 GW of oversized renewable capacity for a 100 ktpa project, while hydrogen storage leads to around 33% utilization and requires 3 GW of renewable capacity.
• Excess power from oversized projects can create additional revenue. In Gujarat, selling excess power at the Green Day Ahead Market (GDAM) price could reduce production costs by nearly 33%, lowering them by $3.2–$4.7/kg.
• Sourcing renewable energy through third-party Power Purchase Agreements (PPAs) allows for up to 100% plant utilization but results in higher landed electricity costs, ranging from ₹5.3/kWh to ₹8/kWh, making it more expensive than vertically integrated models.
• India's National Green Hydrogen Mission has allocated $2.3 billion to support the green hydrogen value chain through 2030. To date, the country has approved projects worth $2 billion, with anticipated investments exceeding $12 billion in the coming years.

APA

RMI (2025). Green Hydrogen Production Pathways for India. https://rmi.org/resources/green-hydrogen-production-pathways-for-india/

Chicago

RMI. Green Hydrogen Production Pathways for India. 2025. https://rmi.org/resources/green-hydrogen-production-pathways-for-india/.

Wikipedia

{{cite report |author=RMI |title=Green Hydrogen Production Pathways for India |date=10 July 2025 |url=https://rmi.org/resources/green-hydrogen-production-pathways-for-india/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025green, author = {{RMI}}, title = {{Green Hydrogen Production Pathways for India}}, institution = {RMI}, year = {2025}, month = jul, url = {https://rmi.org/resources/green-hydrogen-production-pathways-for-india/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }