Green Hydrogen in India: The Sunrise Sector in the Energy Landscape
As the world grapples with the urgent need to mitigate climate change, green hydrogen has emerged as a transformative solution to decarbonize various sectors and foster sustainable development. With abundant renewable resources and ambitious clean energy targets, India stands at the forefront of this global green hydrogen revolution.
The Promise of Green Hydrogen
Green hydrogen, produced through electrolysis using renewable energy sources like solar and wind, offers immense potential to decarbonize hard-to-abate sectors such as transportation, industry, and power generation. Unlike conventional grey hydrogen derived from fossil fuels, green hydrogen emits no greenhouse gases during production, making it a zero-emission fuel.
India's strategic position in the global green hydrogen market is underpinned by its vast renewable energy potential. The government has set an ambitious target of 450 GW of installed renewable energy capacity by 2030, providing a strong foundation for green hydrogen production. The International Energy Agency projects that India could account for 140-150 GW of electrolyzer capacity by 2030, with the country's National Green Hydrogen Mission targeting 5 MTPA of green hydrogen production by the same year.
Policy Push: Catalyzing Green Hydrogen Adoption
Recognizing the critical role of green hydrogen in India's energy transition, the government has launched several policy initiatives to catalyze its adoption. The National Green Hydrogen Mission, backed by a financial outlay of INR 19,744 crore, aims to support the production of green hydrogen, manufacturing of electrolyzers, pilot projects, and R&D in the hydrogen ecosystem.
The Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme, with an allocation of INR 17,490 crore, focuses on creating a green hydrogen ecosystem and enabling industrial decarbonization. These policy measures are expected to spur domestic demand, attract investments, and position India as a global hub for green hydrogen production and export.
Cost Competitiveness: Overcoming the Hurdles
Despite the promising potential, the widespread adoption of green hydrogen in India faces significant challenges, particularly in terms of cost competitiveness. Currently, the production cost of green hydrogen in India ranges from INR 250 to INR 450 per kilogram, significantly higher than the cost of grey hydrogen derived from fossil fuels (INR 110 to INR 180 per kilogram).
This cost disparity poses a major hurdle to the widespread adoption of green hydrogen, especially in cost-sensitive sectors. Alok Kumar, Co-founder of Saarthi GreenTech, highlights the high upfront costs associated with setting up renewable energy infrastructure and electrolyzers as a deterrent for potential investors.
Ramnath Vaidyanathan, AVP & Head of Environmental Sustainability at Godrej Industries Group, echoes this sentiment, stating that the prohibitive cost of green hydrogen solutions hinders industry adoption. He suggests that blue hydrogen, produced from fossil fuels with carbon capture and storage, could be an interim solution until green hydrogen becomes more cost-competitive.
Driving Demand: Infrastructure and Policy Interventions
To fully realize India's green hydrogen potential, the development of a robust ecosystem is crucial. This includes investing in dedicated infrastructure such as pipelines, storage facilities, and distribution networks to facilitate the transportation and storage of green hydrogen.
Startups like Hygenco Green Energies are playing a vital role in developing the green hydrogen ecosystem in India. Amit Bansal, Co-founder and CEO of Hygenco, highlights the company's efforts in setting up green hydrogen and green ammonia production facilities, aiming to contribute to India's green hydrogen targets.
To create a sustainable market for green hydrogen in India, driving demand through policy interventions and mandates is essential. Obligatory mandates or incentives for the use of green hydrogen in the refinery sector, followed by other sectors, could create the requisite domestic demand for developing the local hydrogen ecosystem.
There is also a need for research initiatives in the field of generation, storage, and transportation of hydrogen to support the development of a green hydrogen economy. It’s imperative to think about how to reduce operating costs, transmission and distribution losses, and wheeling charges to make green hydrogen more cost-competitive.
The Way Forward
India's green hydrogen journey is just beginning, and the road ahead is filled with both challenges and opportunities. To fully realise the potential of green hydrogen and become a global leader in this sunrise sector, India needs to focus on several key areas:
Continued policy support and incentives to drive down the cost of green hydrogen production and encourage industry adoption.
Investment in research and development to improve the efficiency and cost-effectiveness of electrolyzers and renewable energy technologies.
Development of a robust ecosystem, including dedicated infrastructure for transportation, storage, and distribution of green hydrogen.
Creation of a conducive regulatory environment that encourages private sector participation and attracts domestic and foreign investments.
Collaboration between government, industry, academia, and startups to foster innovation, knowledge sharing, and best practices in the green hydrogen sector.
As India navigates its path towards a green hydrogen future, the role of startups and venture capital cannot be overstated. By leveraging the country's entrepreneurial spirit, technological prowess, and investor appetite, India has the potential to emerge as a global green hydrogen powerhouse, driving the transition towards a sustainable and low-carbon economy.
