Gujarat Formulates Land Lease Policy to Promote Green Hydrogen Production

Land to be used for solar, wind, and hybrid projects


The Revenue Department, Government of Gujarat, has issued the ‘Policy 2023’ for leasing out land to foster the growth of green hydrogen production in the state.

The policy aims to provide the framework for promoting green hydrogen production by using renewable energy to make the best use of land and achieve the objective of a clean environment.

As per the policy, the lease period for installing solar, wind, and wind-solar hybrid projects for green hydrogen production will be 40 years.

The nodal agency will create a land bank for solar, wind, and wind-solar hybrid projects to produce green hydrogen.

In Gujarat, anyone who wants to develop a green hydrogen production project can apply for land to produce at least 100,000 metric tons of green hydrogen per year.

The applicant must have a minimum net worth of ₹12 billion (~$146.34 million)/100,000 metric tons per year during the last three financial years.

This land will be allocated to develop solar, wind, and wind-solar hybrid projects to produce green hydrogen. The land must be returned if it is not used for this purpose.

The government will allocate only what is required to produce three million metric tons per annum of green hydrogen.

As many green energy projects are to be set up in the state to meet the growing power demand, an estimated 100,000 hectares of government land will be allocated to the state government companies to develop non-conventional energy sources.

Terms for Lease Agreement 

The annual rent of the land allotted by the government will be ₹15,000 (~$182.9)/hectare, which would rise by 15% every three years.

Also, the applicant will have to deposit the annual rent in advance. If the applicant fails to pay the rent for 90 days, an interest of 12% will be levied after the due date.

Upon the transfer of possession, the applicant will be required to execute a tripartite agreement with the collector and the nodal agency while placing a deposit equal to one year’s land rent and paying a 1% service charge and the applicable stamp duty.

Additionally, the applicant will have to furnish an interest-free security deposit of ₹500 million (~$6.09 million)/100,000 metric tons per year of green hydrogen generation.

The government has clarified that the land leased out to produce green hydrogen cannot be subleased to others.

The government has emphasized the need for the prompt commencement of green hydrogen production, which requires the completion of related renewable energy projects within eight years of the land handover. To achieve this, half of the power and green hydrogen generation capacities must be initiated within the next three years, followed by full initiation of both capacities within the subsequent three years.

Further, energy accounting for the electricity generated from the renewable energy unit set up to produce green hydrogen will be arranged separately by the Department of Energy and Petrochemicals.

No banking facility will be available in the state’s power grid on the electricity generated in such a project.

Also, the onus to develop the transmission infrastructure required for renewable projects to produce green hydrogen will be on the developer.

Electricity produced within these parks must be solely utilized to produce green hydrogen and cannot be bought or sold under any circumstances. In the event of any surplus electricity generated during the green hydrogen production period, the Department of Energy and Petrochemicals will make a suitable determination regarding its sale.

Earlier in 2020, the state government of Gujarat had issued amendments to its wasteland allotment policy for wind, solar, and wind-solar hybrid power projects.

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