Ashwani Ashok |
Green hydrogen has been the latest buzzword among the net-zero experts which has started a green fuel rush and made its way in this fossil fuel-dominated energy society. Hydrogen is the lightest, simplest, and most prevalent member of the family of chemical elements in the universe. It is an odourless, tasteless, colourless, non-toxic, and highly combustible gas. However, a colour — green — added to its nomenclature transforms hydrogen into the “fuel of the future”. The utilisation of hydrogen, which burns without producing greenhouse gases, relies on how the energy is produced.
Green hydrogen has already become a focus for COP27 and has already been prioritised in the G-20 agenda in 2023. Amitabh Kant, India’s G20 Sherpa, has stated that the country can transform and become a global leader, exporter, producer of electrolyzers, and champion of green hydrogen, but to do so, multilateral institutions must also assist our entrepreneurs. The current push for the hydrogen transition in India is in line with the country’s bigger goals for economic development, energy security, and a low-carbon economy.
In a country which is dominated by fossil fuels, the energy transition through the phase-down of coal is apparent but this transition needs to be fulfilled through clean energy and here green hydrogen and its. derivatives hold an edge over others. Aiming for net zero is a commitment made by the majority of developed and developing nations, including India. One of the main conditions for emission reduction, particularly in the hard-to-abate sectors, is the switch to green hydrogen and green ammonia. The Government of India is considering a variety of policy initiatives to ease the transition from fossil fuel or fossil fuel-based feedstocks to green hydrogen / green ammonia both as energy carriers and as chemical feedstocks for various industries.
Taking lead and a step closer towards energy transition the Energy Conservation (Amendment) Bill, 2022 has been passed by both houses where the Government has planned to mandate the use of green hydrogen in sectors like steel, refineries, fertiliser, and cement industries, through green hydrogen consumption obligation.
Advantage India
Green hydrogen is the most competitive kind of hydrogen in the long term thanks to India’s specific edge in low-cost renewable energy generation. This makes India potentially one of the most competitive green hydrogen generators in the entire globe. As per Niti Agog , by 2050 India’s hydrogen demand, which makes up close to 10% of the world’s total, might more than quadruple. Initial demand growth is anticipated from developed markets that currently use hydrogen as a feedstock for industry and in chemical processes, such as methanol, ammonia, and refineries. In the long run, steel and heavy-duty transportation are likely to account for over 52% of total demand by 2050, driving the majority of the demand rise.
Challenges ahead
The problems and opportunities surrounding green hydrogen are tangible and genuine. Green hydrogen production is substantially more expensive than hydrogen made from fossil fuels. Green hydrogen will eventually become cost-effective because of declining renewables prices and economies of scale, but much work needs to be done.
When compared to oil and gas, hydrogen has a more intricate supply chain because it may be manufactured using a variety of processes and is used in a wide range of industries. Additionally, transporting and storing hydrogen remains difficult task that will necessitate significant infrastructure modifications.
The capacity of the electrolyzer is anticipated to increase exponentially given the development of green hydrogen. India is starting to produce electrolysers, but the industry is still young. The manufacturing of electrolyzers is also being affected by the competitive climate, and also because China is making aggressive moves to take the lead. It is expected that electrolyzer capacity will increase exponentially by Niti Ayog’s projection of a rise in green hydrogen. Proposals for around 40 GW of electrolyzers by 2030 have already been floated which is only going to rise in near future. Scaling up electrolyzer production would be necessary to bring down the price of hydrogen to a point where the goal of less than $1/kg might become a reality, making it less expensive than producing hydrogen from natural gas or coal with carbon capture and storage and competitive with current natural gas prices in Brazil, China, India, Germany, and Scandinavia on an energy-equivalent basis.
Since the process of producing green hydrogen requires a lot of capital, green hydrogen projects in India will need to take advantage of a variety of public and private financing mechanisms to gain large and noticeable advantages. India presently manages just over $ 20 billion , most of which comes from domestic sources, compared to the $200 billion that is reportedly required annually for green investment for it to achieve its net-zero targets.
The Way forward
State and national policymaking processes must collaborate to achieve widespread adoption of new technology. In the same vein, every state ought to be urged to implement its green hydrogen regulations. For each state, policies can be tailored to meet their demands and use their advantages. For example, some states may concentrate on-demand clusters, while others may concentrate on low-cost green hydrogen production using electrolytic or bio-based pathways. Although technical expertise is crucial, attention must also be paid to economic models, laws, and geopolitics. Developing, designing, and implementing a scalable skills programme will be necessary.
India needs to plan for a manufacturing capacity that can meet both domestic and rising international demand. Given the significance of electrolyzer cost to the cost-reduction pathway for green hydrogen and the substantial manufacturing opportunity it provides, the roadmap needs to include a timeline and level of manufacturing assistance for electrolyser.
The government should establish an ambitious goal for the demand sector, backed up by regulations and sufficient VGFs on more immediately addressable end-use demand. Additionally, a strategy should be developed to suggest specific rules regarding hydrogen blending in current and prospective future consumption sectors along with a necessary incentive to boost its production and use. State-wise roadmap and potential assessment for adopting green hydrogen need to be developed to help boost the economic prospects of green hydrogen in the state.
India has an incredible opportunity to dominate the hydrogen energy ecosystem on a global scale. India can position itself as a hub for low-cost, carbon-free manufacturing while also achieving its objectives of economic growth, job creation, and improved public health with the right policy support, industry action, market acceptance, and increasing investor interest.