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GS Paper: GS3

  • Who are the Angadias?

    An FIR has been registered against some Mumbai Police officials last week for allegedly threatening Angadias and extorting money from them in south Mumbai.

    Who are Angadias?

    • The Angadia system is a century-old parallel banking system in the country where traders send cash generally from one state to another through a person called Angadia that stands for courier.
    • It is by and large used in the jewellery business with Mumbai – Surat being the most popular route as they are two ends of the diamond trade.
    • The cash involved is huge and it is the responsibility of the Angadia to transfer cash from one state to another for which they charge a nominal fee.
    • Generally, it is the Gujarati, Marwari and Malbari community that are involved in the business.

    How does the system work?

    • The Angadia system works completely on trust as large sums, at times in crores, are involved.
    • Generally, traders have the same Angadias for decades together.
    • If a trader from Zaveri Bazaar in south Mumbai wants to pay a diamond trader in Surat, he will send an Angadias who usually delivers the money within 24 hours.
    • They also have fixed trains that leave from Mumbai at night and reach Gujarat by early morning.
    • Usually, to verify authenticity, the trader will, for example, will give a Rs 10 note to the Angadia and provide the number of the note to the recipient.
    • It is only after the recipient confirms the note number that the Angadia will hand over the money to the person.
    • After making the payment, the Angadias return to Mumbai the same day.

    Is the system legal?

    • While the Angadia system per se is legal, there hangs a cloud over the activity as it is suspected that a lot of times it is used to transfer unaccounted money.
    • Since the business deals in cash and there is no account maintained for the same, there have been suspicions that it is also used for transfer of black money like the hawala.

     

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  • Issues with corporate governance in the context of NSE scam

    Context

    Over the past 10 days, the revelations about the functioning of the National Stock Exchange (NSE) during the tenure of Chitra Ramkrishna as Managing Director and Chief Executive Officer (CEO) have raised questions about the governance.

    Managerial misconduct at NSE

    •  There was managerial misconduct at NSE.
    • An effective board of directors: That is why we need checks on management such as an effective board of directors.
    • After the board was informed about the irregularities in Mr. Subramanian’s appointment, it discussed the matter but chose to keep the discussions out of the minutes on grounds of confidentiality and the sensitivity of the matter.
    • Second, despite being aware of Ms. Ramkrishna’s transgressions, it allowed her to resign and on generous terms instead of taking action against her.
    • Third, the Public Interest Directors (PIDs) failed to keep SEBI informed about the goings-on at the NSE.

    Issues with corporate governance

    • In the corporate world, much is forgiven on grounds of performance.
    • When a performing CEO chooses to unduly favour a particular individual or individuals, boards see that as a forgivable infirmity.
    • As for dysfunctional or ineffective boards, these remain the norm despite numerous regulations, seminars and papers over the past four decades.
    • In case of the the NSE, the problem is structural.
    • Selection and absence of penalty: It has to do partly with the way board members are selected and partly with the absence of penalties where directors do not live up to their mandate.
    • Board members are selected by top management (or, in India, by the promoter who is also top management).
    • Board members have every incentive to nod their heads to whatever the management wants to be done.

    Way forward

    • 1] Diversity in the selection of board members: As long as the top management selects all board members or can influence their selection, there is little hope of any active challenge to management.
    • The top management must be allowed to choose not more than 50% of the independent directors.
    • The rest must be chosen by various other stakeholders — financial institutions, banks, small shareholders, employees, etc.
    • 2] Accountability of board members: A second thing that needs to happen is holding board members accountable for lapses.
    • Regulators act against directors where there is financial malfeasance.
    •  This must change. Regulators must penalise errant directors through a whole range of instruments — strictures, financial penalties, removal from boards and a permanent ban from board membership.
    • 3] Accountability of regulator: Regulators themselves must be held to account.
    • In the NSE affair, questions have been asked of SEBI.
    •  For instance, why did SEBI not seek the help of the cyber police to ascertain the identity of the yogi?
    • SEBI needs to explain itself.

    Conclusion

    Convulsions of outrage after particular episodes will not take us very far. We need significant institutional reform if corporate governance is not to remain an illusion.

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  • All you need to know about Satellite Internet

    The Reliance has launched a joint venture (JV) with European satellite-based broadband service company SES to enter the satellite internet space.

    What is Satellite Internet?

    • The technology beams the internet down from a satellite that’s orbiting the Earth.
    • Jio, Bharti Airtel Ltd’s OneWeb, and billionaire Elon Musk’s Starlink want to send thousands of these satellites to orbit.
    • OneWeb plans to launch 648 satellites, while Musk’s Starlink has permits to launch over 4,000 of them.
    • So far, OneWeb has launched over 400 satellites, while Starlink has launched over 2,000 satellites.
    • It’s worth noting that Starlink plans to launch 42,000 satellites in the coming decade. Jio’s journey has only just begun.

    Which satellites will Indian JV use?

    • The JV will use geostationary (GEO) and medium earth orbit (MEO) satellites, while Starlink and OneWeb use low earth orbit (LEO) satellites.
    • LEO satellites are cheaper to make and deploy, but require a satellite constellation working in sync to offer coverage on earth.
    • On the other hand, GEO and MEO satellites are larger, deployed in higher orbits, and therefore cost more.
    • These satellites cover a larger area and require fewer ground stations, which makes them ideal for targeted coverage area.
    • LEOs move faster and can hence provide global coverage.

    What are the advantages of satellite internet?

    • The reason telecom firms want to explore satellite internet is because there are areas where fibre connections just can’t reach.
    • Satellite networks are used to bring connectivity in such areas, which include hills and remote islands.
    • Consumer applications are new, but satellite networks have been used for ages in military applications.

    Are there any disadvantages?

    • The applications and the power of satellite internet are often exaggerated.
    • In reality, these networks have limitations, the biggest being high latency and low bandwidths.
    • Latency is all about internet speed, while bandwidth determines how many devices can connect on a network at the same time.
    • Experts say current satellite connections will bring 1-2 MB bandwidth, which just about qualifies as broadband under India’s broadband policy.
    • Trouble-shooting can be a problem because it needs specialized knowledge.

    Who can use satellite internet?

    • Militaries across the world have depended on satellite communications for a long time.
    • However, many military experts, too, consider this form to be unreliable and too expensive to be made the sole communication medium.
    • In remote areas, satellite internet can still allow businesses to open up local branches and provide digital services.
    • In theory, a bank could set up more ATMs in remote regions if it has access to satellite internet.

     

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  • EV Battery Swapping Policy

    NITI Aayog is holding a consultation on the upcoming electric vehicle (EV) battery swapping policy.

    What is BaaS?

    • Battery-as-a-service (BaaS) is seen as a viable charging alternative.
    • Manufacturers can sell EVs in two forms: Vehicles with fixed or removable batteries and vehicles with batteries on lease.
    • If you buy an electric scooter with battery leasing, you do not pay for the cost of the battery—that makes the initial acquisition almost 40% cheaper.
    • Users can swap drained batteries for a fully charged one at a swap station. The depleted batteries are then charged on or off-site.
    • The advantages of swapping include low downtimes for commercial fleets, reduced space requirements, and lower upfront costs.
    • It is also a viable solution for those who don’t have parking spots at home.

    What is battery interoperability?

    • That’s when a battery is compatible across vehicles and chargers, so you can seamlessly swap a battery at any swap station. This can help achieve scale.
    • However, manufacturer and service providers say there are safety concerns around the ‘one-size-fits-all’ model and caution too much standardization can kill innovation.

    Why hasn’t BaaS taken off yet?

    • There are economic and operational constraints.
    • Energy service providers offering swapping solutions have to charge 18% goods and services tax (GST) for swapping, compared to 5% GST on the purchase of an EV.
    • Additionally, the government’s FAME-II incentives are not offered to vehicles sold with BaaS or swap station operators.
    • While these are economic disadvantages compared to direct charging solutions, the lack of a dense and interoperable battery swap infrastructure has also hindered the roll-out.
    • Manufacturers, on the other hand, are keen to create proprietary battery and charging systems.

    Issues with BaaS

    • There is a need for standardization of safety specifications  as well as  the battery.
    • Swapping in the various permutations and combinations of batteries at a station  where  they  have not been tested for compatibility could lead to safety hazards.
    • Also, mandating only one type of battery to  be eligible for  concessions  would be  disadvantageous  to  many  players.

    Who offers BaaS in India?

    • Bengaluru-based startup Bounce is the first e-two-wheeler maker to sell its scooters with BaaS, and claims to have achieved a million battery swaps.
    • Others like Ola Electric and Ather have stuck to direct charging solutions, while Hero Electric offers both fixed and removable batteries.
    • Many makers are working with energy service providers to offer battery swapping.
    • The global precedent is a mixed bag: Ample, which offers swaps in the US, has found success with commercial fleets, while most personal users charge at home.

    Why is Battery Swapping needed?

    • High Cost of EVs: An EV, by industry standards, is 1.5-2x costlier than IC Engine counterpart and at least half the cost is from the battery pack.
    • Cost reduction: Many manufacturers are offering batteries separately from a vehicle, reducing the cost. In that case, a fleet owner can buy vehicles without battery and utilize battery swapping.
    • Range Anxiety: Another major reason stopping people from buying EVs is range anxiety, or in simple terms, the fear of battery getting empty without finding a charging station.
    • Inadequate charging infrastructure: Unlike petrol pumps, EV charging stations are rare to spot and that further increases the range anxiety exponentially, especially while going on a road trip.
    • Hazard management: In case of a Swapping Station, one can simply locate a station, go and replace the empty battery with a new one.

     

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  • What is Presidential Fleet Review?

    The President of India recently took part in the Indian Navy’s 12th Presidential Fleet Review.

    What is the President’s Fleet Review?

    • In simplest terms, it is the country’s President taking stock of the Navy’s capability.
    • It showcases all types of ships and capabilities the Navy has.
    • It takes place once under every President, who is the supreme commander of the armed forces.
    • The President is taken on one of the Naval ships, which is called the President’s Yacht, to look at all the ships docked on one of the Naval ports.
    • The yacht will be distinguished by the Ashoka Emblem on her side and will fly the President’s Standard on the Mast”.

    Importance of Presidential Fleet Review

    • A fleet review is usually conducted once during the tenure of the President.
    • So far, 11 Presidential Fleet Reviews have been conducted since Independence, of which two have been International Fleet Reviews, in 2001 and 2016.
    • In terms of significance, the Navy’s Presidential review is second only to the Republic Day Parade.
    • The President will be given a 21-gun salute before embarking on the yacht.

    Do all naval ships participate?

    • The idea is to showcase not all the Navy’s ships, but every type of ship — and the kind of capabilities it has at that time.
    • The review also includes merchant ships as well.

    What else happens in the fleet review?

    • In this most formal of naval ceremonials, each ship dressed in full regalia will salute the President as he passes.
    • The President will also be reviewing the Indian Naval Air Arm in a display of spectacular fly-past by several helicopters and fixed-wing aircraft.
    • In the final stage of the review, a mobile column of warships and submarines will steam past the Presidential Yacht.

    How many of these reviews have been held?

    • There have been 11 President’s Fleet Reviews since Independence.
    • The first was conducted in 1953, under Dr Rajendra Prasad.
    • The next one was done not by the President but by the then Defence Minister, Y B Chavan, in 1964.
    • Since then, it has been the President reviewing the fleet.
    • The longest gap between reviews was of 12 years — between 1989 (President R Venkatraman) and when 2001 (President K R Narayanan).
    • The last one was done in 2016, under President Pranab Mukherjee.

    Significance of the event

    • It is one of the most important events for the Navy, which is essentially showing its allegiance and commitment to defending the country.
    • It is a long-standing tradition followed by navies across the world, and according to Navy officials it is a strong bond that links seafarers of the world.
    • Historically, a Fleet Review is an assembly of ships at a pre-designated place for the purpose of displaying loyalty and allegiance to the Sovereign and the state.
    • In turn, the Sovereign, by reviewing the ships, reaffirms his faith in the fleet and its ability to defend the nation’s maritime interest.
    • It is perhaps conceived as a show of naval might. Though it still has the same connotation, assembling of warships without any belligerent intentions is now the norm in modern times.

     

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  • How uniform power cost and electricity duty can achieve higher growth

    Context

    Electricity prices vary not just among end users, but also between states, where a complex patchwork of different taxes and subsidy regimes can leave consumers in some states paying five times more for their electricity than their counterparts in neighbouring states.

    Deprivations faced by Low Income States in India

    • The low-income States (LIS) are deprived on many fronts.
    • They have low accessibility to credit, low investments, low power availability and accessibility, and high energy costs.
    • The high-income States (HIS), on the other hand, have a big share in industry and commerce because they are not deprived on the same fronts.
    • The six HIS (Maharashtra, Tamil Nadu, Gujarat, Karnataka, Andhra Pradesh and Telangana) together account for 56.4% of factories and 54.3% of the net value added to the country, while their share in population is only 32.3%.
    • Among other reasons, this is because they have higher credit and financial accessibility (55% of total institutional credit and 56% of total industrial credit went to these five HIS) at the credit-deposit ratio.
    • On the other hand, the six LIS (Bihar, Jharkhand, U.P., M.P., Odisha, and Rajasthan) access only 15% of total institutional credit and barely 5% of total industrial credit, while their share in population is 43%.
    • The maximum benefit of the Atmanirbhar package (₹20 lakh crore) also went to the HIS as they have a higher share in industry.

    Role of power supply in disparity among states

    • Among other reasons, the availability of adequate quality power at the cheapest rate attracts investments, either private or public, in a particular location.
    • Due to a complex patchwork of different taxes and subsidy regimes, electricity prices vary not just among end users, but also between states.
    • This can leave consumers in some states paying five times more for their electricity than their counterparts in neighbouring states.

    Solutions

    •  Energy India Outlook 2021 provides two solutions.

    1] Eliminate price discrimination by synchronising all regional grids

    • The power-producing States have the advantage of power,  being available at lower prices.
    • This problem can be addressed by synchronising all the regional grids.
    •  This will help the transfer of energy (without compromising quality).
    • The idea is of ‘One Nation, One Grid, One Frequency’.
    • Further, this will pave the way for establishing a vibrant electricity market and facilitate the trading of power across regions through the adoption of the ‘one tariff’ policy.
    • The Central Electricity Regulatory Commission is in the process of implementing a framework of the Market-Based Economic Dispatch and moving towards ‘One Nation, One Grid, One Frequency, One Price’.

    2] Include electricity duty in GST

    • Apart from uniform cost, the power sector also needs uniformity in electricity duty charged by different States.
    • In general, the association between income and electricity consumption is direct.
    • Thus, only 32% of the population used 50% of power.
    • Contrary to this, six backward States got only 25% of the power though their share of the population is 43%.
    • Therefore, it is clear that the substantial proportion of the power cost incurred in HIS is also borne by the LIS which buy those industrial products, as the input cost of power has already been included in the product’s price.
    •  Further, this situation justifies the fact that the final costs of power consumption are also borne by other States.
    • Thus, the electricity duty should be redistributed among the States under the ambit of GST equally shared by the CGST and SGST.

    Conclusion

    In order to attain higher economic growth, the States should raise the issue of uniform energy tariff and inclusion of electricity duty under the ambit of GST.

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  • Can dark matter be composed, even partly, of black holes?

    A recent hypothesis says that dark matter comprises a large number of compact objects such as primordial black holes.

    What are Dark Matters ?

    • Astronomical observations suggest that a significant part of the universe is made up of dark matter which interacts with the rest of the universe only through the gravitational pull.
    • Many large lab experiments have tried to detect elementary particles that could be candidates for dark matter.
    • However, such dark matter particles have not been detected until now.
    • Several astronomical observations suggest that all galaxies are embedded in a “halo” of dark matter.
    • The “visible” galaxy is like a disc embedded in a dark matter halo that is much larger in size.

    What is the recent proposition?

    • When the universe was very young, hot and dense – soon after the Big Bang, it must have had quantum fluctuations of its density.
    • This, in turn, would have caused some regions to become extremely dense, and therefore, to collapse under their own gravity to form the primordial black holes.
    • While we have no conclusive evidence of spotting these objects, some of the binary black hole mergers detected by the LIGO gravitational wave detectors might be primordial black holes.
    • The question is open there is good reason to believe that primordial black holes did form in the young universe.

    Observing dark matter: Gravitational Lensing

    • The paper explores what happens when such objects get in the way of gravitational waves traveling towards the Earth from the distance.
    • It invokes a phenomenon called gravitational lensing that is used regularly in astronomy.
    • When light travels through space and passes near a massive or compact body – a star, a galaxy or a black hole, for example, the intense gravity of that body may attract the light towards it.
    • This causes bending it from its rectilinear (straight line) path.
    • This phenomenon is known as gravitational lensing and was first observed by Arthur Eddington in 1919.

    How intense are they?

    • Massive objects like galaxies can bend light significantly, producing multiple images, this is called strong lensing.
    • Lighter objects like stars or black holes bend light less, and this is called micro-lensing.
    • A similar lensing can happen to gravitational waves travelling towards the Earth, and this would leave signatures in the detected gravitational waves.
    • This can be used to detect the presence, or the existence, of primordial black holes.

    Assessing dark matter

    • Until now, individual black holes have not marked out these signatures on gravitational waves detected by the LIGO-VIRGO detectors.
    • However, if all of the dark matter is made of primordial black holes, they should have produced detectable signatures on the gravitational wave signals.
    • The researchers use the non-observation of the lensing signatures to assess what fraction of the dark matter could be made of black holes.

    Way ahead

    • This provides a new way of constraining the nature of dark matter.
    • The study concludes that black holes in the mass range from a hundred to a million solar masses can contribute only up to 50-80% of the dark matter in the universe.
    • This is an upper limit and the actual fraction can be much smaller.
    • These upper limits will get better and better with more and more observations.

     

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  • Lucy Mission to probe Jupiter’s Trojan Asteroids

    NASA is set to send its first spacecraft to study Jupiter’s Trojan asteroids to glean new insights into the solar system’s formation 4.5 billion years ago.

    Lucy Mission

    • Lucy will fly by eight Jupiter asteroids—seven Trojans and one main-belt asteroid — over the next 12 years.
    • It is NASA’s first single spacecraft mission in history to explore so many different asteroids.
    • Lucy will run on solar power out to 850 million km away from the Sun.
    • This makes it the farthest-flung solar-powered spacecraft ever, according to NASA.

    What is Jupiter Trojan Asteroids?

    • Simply known as Trojans, they are a large group of asteroids that share Jupiter’s orbit around the Sun.
    • Thousands of such asteroids exist in a gravitationally stable space.
    • The swarms lead and follow the planet Jupiter along its orbit around the Sun.

    What exactly are Trojans?

    • Lucy’s Trojan destinations are trapped near Jupiter’s Lagrange (L) points, which are gravitationally stable locations — it is where the gravity from the Sun and from Jupiter cancel each other out.
    • This means their orbits are stable and the Trojans are trapped in the space between.
    • This also means that asteroids are as far away from Jupiter as they are from the Sun.
    • Jupiter’s leading and trailing Lagrangian points (L4 and L5) have been stable over the age of the solar system.
    • This means that their orbits have accumulated many, many asteroids.
    • It makes sense to call a Trojan a co-orbital object, which moves around one of the two stable Lagrangian points.

    When and how were they discovered?

    • It took many a scientist to understand Trojans, and subsequently, name them so.
    • A German astrophotographer in 1906 made an important discovery: An asteroid with a particularly unusual orbit. As Jupiter moved, this asteroid remained ahead of Jupiter.
    • It was observed that the asteroid was nearly 60 degrees in front of Jupiter.

    Students with engineering background would better understand who Lagrange was. Rest need not care.

    Lagrange’s propositions

    • This specific position of a particular behavior was predicted by the Italian-French mathematician Joseph-Louis Lagrange over 100 years earlier.
    • Lagrange had argued that if a small celestial body is placed at one of two stable points in a planet’s orbit around the Sun (the L4 and L5), the asteroid would remain stationary from the planet’s perspective.
    • This is due to the combined gravitational forces of the planet and the Sun.
    • Thus, Lagrange’s prediction acquired credibility. More such asteroids were discovered over subsequent months in Jupiter’s Lagrange point L5.

    Behind the name: Lucy

    • It is the fossil of a hominin that lived 3.2 million years ago.
    • She is known to be one of the most famous pre-human fossils in history.
    • Nearly 40 percent of the fossilized skeleton of this hominin was discovered in 1974 by a team of paleoanthropologists led by Donald Johanson.
    • The name was inspired from the famous Beatles song “Lucy in the Sky With Diamonds,” which Johanson’s team listened to at camp the night of their discovery.

    Back2Basics: Lagrange Points

    • Lagrange points are positions in space where objects sent there tend to stay put.
    • They are named after Italian-French mathematician Josephy-Louis Lagrange.
    • At Lagrange points, the gravitational pull of two large masses precisely equals the centripetal force required for a small object to move with them.
    • These points in space can be used by spacecraft to reduce the fuel consumption needed to remain in position.
    • There are five special points where a small mass can orbit in a constant pattern with two larger masses.

     

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  • Beyond the hype of blockchain, a look at its reality

    Context

    Blockchain is a fascinating data structure that generates great curiosity. However, there is a lot of hype around the concept and its adoption in diverse fields seems to be faith-based, driven by unsubstantiated vendor and consultant claims.

    Two main functional properties of blockchain

    • A blockchain is a sequential append-only public bulletin board of transaction records with two main functional properties. 
    • 1] Verification by peers: What can get added is reconciled by multiple participating  peers following a pre-decided consensus protocol.
    • This process cannot be gamed under the assumption that a majority of the unrestricted number of peers are honest.
    • 2] Immutable record: recryptographically ensured that it  cannot be altered.
    • Each participating peer normally has their own copy of the entire bulletin board, with identical content, and they can read and further copy at will.

    Applications and their limits

    • Private blockchain: A “permissioned” or private blockchain has only pre-identified participating peers.
    • Hence, collusion is possible and integrity can only be ensured through regulations.
    • Without political decentralisation, consensus does not imply safety, and this is no different from centralisation in its threat model.
    • Privacy concern is not addressed: Despite many claims to the contrary, the blockchain structure has nothing to do with the highly-nuanced notion of privacy, or even the limited secrecy aspect of it.
    • To ensure secrecy of the bulletin board records, one has to fall back on traditional and well-established notions from cryptography — like encryption, key management and zero-knowledge proofs.
    • “Consensus” is inapplicable when there is only one authority responsible for the integrity of the transactions, for example, the Election Commission of India when a vote is cast in the privacy of a polling booth or a person is added or removed from a voters’ list.
    • Issues with use for voting purpose: Also, voting is not the only example of the inadequate analysis of the applicability of blockchain, and there are proposals for using them for land records, asset registers, etc.
    • Most such proposals do not pass muster for reasons similar to voting.
    • The role of blockchain in RBI’s digital currency proposal is similarly doubtful, and convincing methods independent of “consensus” need to be developed to ensure the correctness and verifiability of transactions while protecting user privacy.

    Issues with application for cyrptocurrencies

    • Macroeconomic implications not clear: Currency properties and monetary policies have evolved over thousands of years of bartering, and it is not clear that cryptocurrencies are consistent with them or that the larger macroeconomic implications of cryptocurrencies are well understood.
    • Crypto assets derive their values from their potential to be exchanged for other currencies.
    • Uncertain price determination: Since only a limited set of commodities are traded with crypto assets,  their price determinations with respect to sovereign fiat currencies are uncertain.
    • Potential to increase inequality: Apart from the crucial price stabilisation issues, their potential to further inequality is also considerable.
    • Environmental impact: The total carbon footprint of cryptocurrencies is equivalent to that of a few megacities, and it does seem ungainly, energy-inefficient and unsustainable to mine assets this way.

    Way forward

    • What may help in many of these applications is just the immutable public bulletin board part of a blockchain, with or without encryption and zero-knowledge proofs.
    • This may be simply achieved by the concerned authority periodically publishing the bulletin board in a publicly downloadable forum, and using hash chains verifiable by all to make alterations impossible.
    • Given the carbon footprint associated with cryptocurrencies, it requires regulation and taxation, especially for the potential environmental impacts and because only a few participate.

    Consider the question “What is blockchain technology? What are its potential applications and concerns with these applications?” 

    Conclusion

    Blockchain is certainly an elegant concept whose properties and potential require careful research. The hype of treating them as solutions for everything with not-so-thoughtful use cases is perhaps techno-determinism at its worst.

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  • Green Hydrogen Policy

     

    The Ministry of Power has notified the first part of the National Hydrogen Mission policy on green hydrogen and green ammonia, aimed to boost production of hydrogen and ammonia using renewable energy.

    What is green hydrogen?

    • Green hydrogen is hydrogen gas produced through electrolysis of water.
    • It is an energy intensive process for splitting water into hydrogen and oxygen— using renewable power to achieve this.

    Key takeaways of the Green Hydrogen Policy

    • The new policy offers 25 years of free power transmission for any new renewable energy plants set up to supply power for green hydrogen production before July 2025.
    • This means that a green hydrogen producer will be able to set up a solar power plant in Rajasthan to supply renewable energy to a green hydrogen plant in Assam.
    • It would not be required to pay any inter-state transmission charges.

    What are the incentives?

    • The government is set to provide a single portal for all clearances required for setting up green hydrogen production.
    • It will facilitate producers to transfer any surplus renewable energy generated with discoms for upto 30 days and use it as required.
    • The requirement of time bound clearances for these projects would spur investment while grid connectivity on priority will ease operational processes.
    • The energy plants set up to produce green hydrogen/ammonia would be given connectivity to the grid on a priority basis.
    • State DISCOMS may also procure renewable energy to supply green hydrogen producers but will be required to do so at a concessional rate.
    • Such procurement would also count towards a state’s Renewable Purchase Obligation (RPO) under which it is required to procure a certain proportion of its requirements from renewable energy sources.

    Facilities to boost export

    • Under the policy port authorities will also provide land at applicable charges to green hydrogen and green ammonia producers to set up bunkers near ports for storage prior to export.
    • Germany and Japan could be key markets for green hydrogen produced in India.

    Why such move?

    • The move is likely going to make it more economical for key users of hydrogen and ammonia such as the oil refining, fertiliser and steel sectors to produce green hydrogen for their own use.
    • These sectors currently use grey hydrogen or grey ammonia produced using natural gas or naphtha.

     

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