India joins the race to a green hydrogen future

The race to produce cheap green hydrogen has a new and serious competitor with India announcing a suite of green hydrogen plans.

The Green Hydrogen Policy put out by the Ministry of New and Renewable Energy (MNRE) envisages the production of 10 million tons of green hydrogen by 2030 with half of that being used as a  substitute for fossil fuels in transport and in the hard to abate industrial sectors.  The other 5 million tons would be earmarked for export.

In mid-October the US Biden administration announced its national plans for green hydrogen, with a cost of about $50bn.

According to the International Energy Agency, clean hydrogen should account for roughly a tenth of total energy consumption by 2050, and an additional US$380 billion in hydrogen investment is needed by the end of this decade, on top of the $320 billion already announced.

“The EU has understood the message,” Jorgo Chatzimarkakis, the CEO of Hydrogen Europe, told Cosmos, “and it has set ambitious global clean hydrogen production targets, with projects stretching beyond the 27-country bloc’s borders.”

India says its plan requires a whole-of-government approach. Accordingly an Empowered Group has been put in place to coordinate and financial incentives and programs are being developed by various departments .

It is hoped that green hydrogen production, supply, and uses would create the ecosystem and the domestic capacities for rapid scaling up by the end of this decade.

This would help accelerate India’s journey to net zero as green hydrogen offers promise as a technically feasible substitute for fossil fuels in industrial processes and transport where renewable electricity cannot.

For the production of green hydrogen, $2.52bn (Rs 13,050 crores) in financial incentives have been announced and another $828m (Rs 4,440 crores) for the production of electrolysers.

Green hydrogen production incentives will start at $0.93c/kg (Rs 50) in the first year then be reduced to $0.75 in the second year (Rs 40) in the second  year and $0.56 (Rs 30) in the third and final year.

Electrolyser production incentives will be  similarly graded down over five years. Firms would become eligible for these incentives through a bid process.

The scramble to hop aboard the green hydrogen bandwagon has begun with numerous private firms such as Reliance, Adani, ReNew Power and L&T lining  up for a piece of the action. Reliance wants to produce green hydrogen for $USD1 a kg by 2030. 

Ten states led by Gujarat, but including Karnataka, Maharashtra and Kerala, have also been identified as potential production hubs.

The next step is to generate demand for production.

Green hydrogen is just the beginning. The production of green ammonia using green hydrogen is also envisaged. Green ammonia can give us green fertiliser, green shipping and green electricity for meeting seasonal peaks.

India hopes its green hydrogen mission will make it a globally competitive producer and consumer by 2030. It could then be well placed to move towards becoming a carbon net zero economy.

This article was drawn from content written by Ajay Shankar, a Distinguished Fellow at the The Energy and Resources Institute, New Delhi, originally published under Creative Commons by 360info™.