Last Update
03 February 2025
India’s green hydrogen sector may belong to big players; costs to squeeze-out small firms
What is Eninrac’s Overall Outlook on Green Hydrogen Sector Investments in India
Viewpoint by Mr. Ravi Shekhar (MD, Eninrac)
“It is indeed true that the initial excitement around the green hydrogen business in India stands reduced with the early enthusiasm from companies of all sizes entering the sector has diminished, leading to a landscape increasingly dominated by large firms,” said Ravi Shekhar, founder and managing director, Eninrac, a research consultancy.
India’s green hydrogen market is projected to be worth $8 billion by 2030 and $340 billion by 2050, which indicates substantial investments primarily from major players. That the production of green hydrogen requires investments in advanced technologies such as electrolysers and these high capital expenditures pose challenges for small and medium-sized enterprises.
The criteria of net worth for players participating in RfS for SECI bids is another challenge for smaller players.
The stringent financial requirements create significant barriers for MSMEs, as their investment in plant and machinery is capped at $6 million. This effectively excludes many manufacturing businesses and start-ups from entering the electrolyzer manufacturing sector,” he said.
The Request for Selection mandates a minimum net worth of about $120,000 per MW and a performance bank guarantee of $18,048 per MW. With a minimum bid capacity set at 100 MW under Bucket-1, bidders are required to demonstrate a net worth of $12 million and provide a
performance bank guarantee of $1.8 million.
Viewpoint by Mr. Ravi Shekhar (MD, Eninrac)
“It is indeed true that the initial excitement around the green hydrogen business in India stands reduced with the early enthusiasm from companies of all sizes entering the sector has diminished, leading to a landscape increasingly dominated by large firms,” said Ravi Shekhar, founder and managing director, Eninrac, a research consultancy.
India’s green hydrogen market is projected to be worth $8 billion by 2030 and $340 billion by 2050, which indicates substantial investments primarily from major players. That the production of green hydrogen requires investments in advanced technologies such as electrolysers and these high capital expenditures pose challenges for small and medium-sized enterprises.
The criteria of net worth for players participating in RfS for SECI bids is another challenge for smaller players.
The stringent financial requirements create significant barriers for MSMEs, as their investment in plant and machinery is capped at $6 million. This effectively excludes many manufacturing businesses and start-ups from entering the electrolyzer manufacturing sector,” he said.
The Request for Selection mandates a minimum net worth of about $120,000 per MW and a performance bank guarantee of $18,048 per MW. With a minimum bid capacity set at 100 MW under Bucket-1, bidders are required to demonstrate a net worth of $12 million and provide a
performance bank guarantee of $1.8 million.
He further added that the substantial financial burden of the bank guarantee requirement poses another challenge for entities without established credit lines, making it even more difficult for them to participate in the bidding process.
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