Dr. Arvind Kumar*
With the announcements coming from the European Union, Kazakhstan, Namibia, Egypt, Oman, and Kenya, green hydrogen took a centre stage at COP 27 last year. A green hydrogen revolution has begun to take shape as more and more nations have unveiled roadmaps, policies, and incentives. The Union Cabinet of India approving a ₹19,744 crore National Green Hydrogen mission that aims to make India a ‘global hub’ for using, producing and exporting green hydrogen. This is undoubtedly a challenging feat to achieve. India’s economy is projected to grow to $20-30 trillion over the next three to five decades and this growth coincides with our net zero commitments. The problems and opportunities around green hydrogen are tangible and actual. Demand and supply side policy pushes are required. While the Hydrogen Mission claims to offer the required guidance, it also needs to be sensitive to changing geo-economics of energy to give India the best chance to capitalize on its green hydrogen opportunity.
The intent of the mission is to incentivize the commercial production of green hydrogen and make India a net exporter of the fuel. The mission has laid out a target to develop green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum. This is alongside adding renewable energy capacity of about 125 GW (gigawatt) in the country. This will entail the decarbonisation of the industrial, mobility and energy sectors; reducing dependence on imported fossil fuels and feedstock; developing indigenous manufacturing capabilities; creating employment opportunities; and developing new technologies such as efficient fuel cells. By 2030, the Centre hopes its investments will bring in investments worth ₹8 trillion and create over six lakh jobs. Moreover, about 50 MMT per annum of CO2 emissions are expected to be averted by 2030. As per its Nationally Determined Contribution (NDC) to meeting the goals of the Paris Agreement, India has committed to reduce emissions intensity of its GDP by 45% by 2030, from 2005 levels.
It might be necessary to emphasize once more that hydrogen is not a primary fuel since, unlike other primary energy resources like fossil fuels, nuclear fuels, or renewable energy sources; it is not readily available in a naturally pure form. It is similar to how protons and electrons move in electricity in that neither is naturally occurring and must be produced by a primary energy source. But because they may be produced at one end, transferred, and then consumed at the other, both are effective energy carriers. There are no further parallels between hydrogen and electricity. India Water foundation made a presentation at the Ministry of Petroleum and Natural gas, government of India on factoring water in production of green hydrogen and are looking forward to contributing further as well,
How favourable is economics for green hydrogen
India is well-positioned to directly transfer some of the lowest realised renewable costs in the world into a globally competitive green hydrogen economy, as shown by NITI Aayog and RMI’s Harnessing Green Hydrogen report. Days before the cabinet’s approval, the NTPC revealed it had started green hydrogen blending in Gujarat and India’s railways minister Ashwini Vaishnaw announced India would have its first green hydrogen-fueled trains by the end of 2023.
India’s annual energy consumption is 7,000 terawatt hours (TWh), of which only 4% is derived from renewable sources. The majority of the total energy consumed—1,400 terawatt hours of electricity—is used for the transportation, industrial, commercial, agricultural, and residential sectors. 85% of India’s energy needs are met by fossil fuels, mostly coal, oil, and gas. Solar and wind power make up roughly 4% of installed capacity, nuclear power makes up 2.5% and hydropower makes up 4.5%. Depending on the growth trajectory, the current energy consumption of 7,000+ TWh will expand 5-7 fold over the following 3-5 decades, just about the period when New Delhi sets a net zero target. But how this transition towards a cleaner alternative will hinge one pivotal action: accelerating India’s decarbonisation. The push for green hydrogen is intended to reduce India’s massive carbon emissions, which total 2.7 billion tonnes, by about 55 million tonnes.
Other than the role of external factors, other domestic factors such as inadequate funding for clean energy, challenges of land acquisition for renewable energy projects as well as lack of coordination between national targets and state-level enforcement played a crucial part. It is important to note that these challenges will also spill over as hurdles to meeting the targets set for green hydrogen.
So what makes hydrogen important to India?
There are significant reasons; first, the need for huge infrastructure development to carry all the energy as electricity, massive investment is required in the development of T&D infrastructure along with maneuvering the potential disruption due to the possibility of hacking of the network in this AI age. Second, green hydrogen can act as storage of renewable energy, and by doing so make the ‘infirm’ nature of renewable energy a ‘firm energy’. In that sense, hydrogen is a carrier of renewable electricity (and might in future be of nuclear energy as well). Third, hydrogen can step in as a substitute for material sustainability of fertilizers, plastics and steel.
India’s Challenge: Using Competitive Advantages and Acting Quickly
All of this is to push climate policy. In comparison to the United States and Europe, India also stands to gain; nevertheless, it also necessitates the urgency to act and the expansion of objectives to facilitate a faster transformation. The $1/kg target, which looks ambitious for a 2030 timeframe, is quickly losing relevance as governments strive to reach it in a considerably shorter period of time through incentives and other government support. In this developing environment, it is important to pay attention to the potential role that ammonia and hydrogen exports could play in India as market-creating engines. More aggressive incentives and market development methods are required to significantly boost competition. Additionally, in this competitive environment, India is beginning to produce electrolysers, but it is still in its infancy. China now dominates the global electrolyser production market. India’s manufacturing can therefore be greatly accelerated with target-backed government incentives in order to gain a piece of this global capacity.
The problems and opportunities around green hydrogen are tangible and actual. Demand and supply side policy pushes are required. While the Hydrogen Mission claims to offer the required guidance, it also needs to be sensitive to changing geo-economics of energy to give India the best chance to capitalize on its green hydrogen opportunity. The recent announcement by PM Modi on green hydrogen is just the way to move ahead. To ensure that the Indian economy grows quickly and sustainably, this will need to be followed by other missions like the hydrogen fuel cell mission (HFC), blue hydrogen mission, and CCUS mission.
Green hydrogen development is still in the nascent stages globally and while India can take the lead in being a major producer, it doesn’t have the necessary infrastructure yet to execute all these intermediary steps. It also needs to announce incentives to convince enough users of industrial hydrogen to adopt green hydrogen. It needs to develop inclusive supply chains in the form of pipelines, tankers, intermediate storage and last leg distribution networks as well as put in place an effective skill development programme to ensure that lakhs of workers can be suitably trained to adapt to a viable green hydrogen economy. Concerted national and international efforts going forward would be required in the field of finance and investments, policy planning and research.
*President, India Water Foundation
