Context:

Recently, the World Economic Forum, in collaboration with Bain & Company, emphasizes in their report, Green Hydrogen: Enabling Measures Roadmap for Adoption in India,” the necessity of reducing the production cost of green hydrogen to $2 per kg or less.

Key Recommendations from the report

Reduce Production Costs:

  • Green hydrogen costs around $4–5/kg; aim to bring it below $2/kg.
  • Lower energy storage costs for round-the-clock energy; offer subsidies for storage technologies.
  • Increase direct subsidies for early adopters in electrolyser production to reduce costs significantly.

Boost electrolyzer capacity:

  • Develop and test indigenous electrolyzer technology.
  • Increase planned capacity to meet target.

Create green hydrogen production clusters:

  • Encourage collaboration and offtake of green hydrogen nearby.
  • Develop a pipeline network for green hydrogen transport.

Define “green” products:

  • Establishing precise definitions, emission thresholds, and a methodology for monitoring carbon emissions is highlighted as crucial for accurately defining “green steel” or “green cement” and achieving Net Zero emissions by 2070.
  • Develop methodology for monitoring and measurement of carbon emissions.

International Trade Opportunities:

  • Green hydrogen derivatives (methanol, ammonia) trade operates in an unregulated market.
  • India could leverage this to become an export hub.

Hydrogen 

  • Hydrogen can be produced from a variety of resources. The most common method is through a process called steam methane reforming, which involves reacting natural gas with high-temperature steam. 
  • Electrolysis is another method, where an electric current is used to split water into hydrogen and oxygen. 
  • Bureau of Energy Efficiency (BEE), Ministry of Power shall be the Nodal Authority for accreditation of agencies for the monitoring, verification and certification for Green Hydrogen production projects.

Green Hydrogen:

  • Electrolysis of water using renewable energy (wind or solar power).
  • Zero CO2 emissions, making it the most sustainable option.
  • Currently more expensive due to renewable energy and electrolysis equipment costs.

Grey Hydrogen:

  • Steam methane reforming from natural gas.
  • High CO2 emissions, making it less sustainable.

Blue Hydrogen:

  • Similar to grey hydrogen, but COemissions are captured and stored or utilized.
  • Cleaner than grey hydrogen, yet still relies on fossil fuels.

Pink Hydrogen:

  • Electrolysis using electricity from nuclear power.
  • Low-carbon, dependent on nuclear power method and waste disposal.
  • Enables continuous production, unlike intermittent renewable sources.
  • Associated with nuclear power, including waste disposal and safety concerns.

The Report on Green Hydrogen in India Highlights Several Challenges and focus areas:

  • Green hydrogen production costs are currently double that of grey hydrogen, posing a financial challenge for adoption.
  • Green hydrogen production costs range from $4-5 per kilogram, primarily driven by round-the-clock renewable electricity and electrolyser expenses.
  • The existing subsidy of $54/kW for manufacturing electrolysers is deemed insufficient, necessitating an increase to expedite cost reduction.

Despite the national mission, there is limited on-the-ground traction for green hydrogen, with key players adopting a cautious ‘wait-and-watch’ approach.

  • Anticipation of substantial green hydrogen production beginning post-2027, indicating a delayed timeline for achieving the set targets.
  • The reported 8 GW of electrolyser capacity in the pipeline falls significantly below the baseline requirement of 35-40 GW to meet the 5 million tons annual target by 2030.
  • The report suggests the development and testing of indigenous electrolyser technology to meet the required capacity.
  • The international trade of green hydrogen derivatives operates in an unregulated market, potentially posing challenges for India to establish itself as an export hub.
  • Additional costs associated with storage and transport of green hydrogen, prompting the need for strategic solutions.
  • The development of green hydrogen production clusters and a pipeline network for efficient transportation throughout the country requires substantial investment and planning.

Present status of adoption of Green Hydrogen in India

National Green Hydrogen Mission: India’s Green Hydrogen production capacity is likely to reach 5 MMT per annum, contributing to reduction in dependence on import of fossil fuels. Achievement of Mission targets is expected to reduce a cumulative ₹ 1 lakh crore worth of fossil fuel imports by 2030.

  • Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme: Issued Request for Selection (RfS) for selection of Green Hydrogen producers for setting up production facilities of 450,000 tons for Green Hydrogen in India 2.
  • GAIL Limited has started India’s maiden project of blending Hydrogen in City Gas Distribution grid. 
  • NTPC Limited has initiated blending of Green Hydrogen up to 8% (vol/vol) in PNG Network at NTPC Kawas Township, Surat, Gujarat from January 2023.

PSUs have taken up various projects such as:

  • Hydrogen based Fuel-Cell Electric Vehicle (FCEV) Buses in Leh by NTPC
  • Hydrogen based Fuel-Cell Electric Vehicle (FCEV) Buses in Greater Noida by NTPC
  • Oil India Limited has developed a 60-kW capacity hydrogen fuel cell bus, which is a hybrid of an electric drive and a fuel cell.
  • Demonstration pilot plants for production of Green Hydrogen through water electrolysis using solar power, biomass oxy steam gasification and CBG reforming for refueling 15 no. of Hydrogen Fuel Cell buses by Indian Oil.

Way Forward

  • To accelerate green hydrogen adoption in India, focus on lowering production costs below $2/kg by enhancing subsidies, expanding electrolyzer capacity through indigenous technology, establishing green hydrogen clusters, and defining precise emission thresholds. 
  • Additionally, leverage unregulated international trade, promote blending projects, and invest in strategic interventions to achieve the National Green Hydrogen Mission targets, reducing fossil fuel imports and creating job opportunities.

Also Read:

Carbon Border Adjustment Mechanism (CBAM)

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