Hydrogen first became a strategic area of interest for Indian policymakers way back in 2006 when the Ministry of New and Renewable Energy (MNRE) launched Hydrogen and Fuel Cell Roadmap. After a long gap of 10 years, the MNRE in 2016 laid out a comprehensive plan for increasing R&D activity including significant funding for different electrolyzer technologies. Since then there have been considerable efforts to establish a hydrogen economy in India, both by the public as well as private companies.

While hydrogen is already used extensively in India, it is mainly as an industrial feedstock in the creation of ammonia-based fertilizers. Most hydrogen in India is produced through reforming methane (CH4), resulting in significant carbon dioxide emissions. There is the potential to capture these emissions using carbon capture and storage (CCS) technology, although this is relatively underdeveloped in India.

Along with electricity prices, the other important factor for reducing the costs of green hydrogen is the capital cost of electrolyzers. These are expected to continue to fall

with a scale-up in deployment, as most electrolyzers today are manufactured on a relatively small scale. This provides India with an opportunity to develop a manufacturing hub here, taking advantage of competitive labour costs and a technically proficient workforce.

Hydrogen can provide a supplementary role to renewables and batteries, in a transition to a carbon neutral economy. Early demand markets for hydrogen include fuel cells for trucking, balancing supply and demand in the power sector and replacing fossil fuels in industry.

By 2050, nearly 80% of India's hydrogen is projected to be green, produced by renew[1]able electricity and electrolysis. While grey hydrogen production technologies are mature, many green hydrogen technologies are still at a stage of emergence, whereby markets are still developing and manufacturers are engaged in experimentalist learning.

Green hydrogen may become the most competitive route for hydrogen production by around 2030. This may be driven by potential cost declines in key production technologies and in clean energy technologies such as so[1]lar PV and wind turbines.

The Indian corporate sector is taking significant steps in the direction of accelerating the production of hydrogen. Indian Oil Corporation plans to build the country's first green hydrogen plant at its Mathura refinery.

NTPC plans to use electricity generated from its upcoming renewable energy projects to generate green hydrogen on a commercial scale. Indian Oil, Larsen & Toubro (L&T) and ReNew Power have signed a binding term sheet for the formation of a joint venture (JV) company to develop the nascent green hydrogen sector in India. Additionally, IndianOil and L&T have signed a binding term sheet to form a JV with equity participation to manufacture and sell Electrolyzers used in the production of Green Hydrogen.

Both these JVs aim to enable the nation's 'Aatmanirbhar Bharat' mission to rapidly build, expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and a chemical feedstock for many sectors. The planned JVs aim to enable India's transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy.

L&T has signed a pact with Norway based electrolyzer technology manufacturer to set up a gigawatt scale manufacturing unit for alkaline water electrolysis unit in India. Adani is targeting to become one of the largest green hydrogen producers in the world. It plans to invest US$ 20 billion in renewable energy generation over the next decade and is keen to use it for producing green hydrogen. HPCL is setting up a green hydrogen project of 370 TPA (2.6 MW) capacity at Visakh Refinery by January, 2023.

EVOLVING POLICY

The central government in February notified the Green Hydrogen policy aimed at boosting production of green hydrogen and green ammonia to help the nation become a global hub for the environmentally friendly version of the element. For countries like India, with its ever-increasing oil and gas import bill, green hydrogen can also help provide crucial energy security by reducing the overall dependence on imported fossil fuels.

While nearly all hydrogen produced in India today is grey, it is estimated that demand for Hydrogen will be 12 MMT by 2030 and around 40% of the element produced in the country (around 5 MMT) will be green, as per the draft National Hydrogen Mission guidelines.

To help decarbonize Indian industry, the new green hydrogen policy provides for the waiver of InterState transmission charges for a period of 25 years and a banking provision of up to 30 days, which will help reduce the cost of green hydrogen significantly. This will, therefore, push the replacement of grey hydrogen with green. The Ministry of Power has also provided a single-window-clearance portal for all clearances and open access on priority to green hydrogen projects.

 The Government of India plans to introduce a PLI scheme for electrolyzer mote green hydrogen production in India at an outlay of US$ 2 billion. In line with the government's plan to export green hydrogen and green ammonia, a detailed in-depth analysis to assess the potential needs to be undertaken. The cost of infrastructure and safety concerns would also need to be addressed. Various leading industry players have also made ambitious announcements across the hydrogen value chain.

WAY FORWARD

The paradigm shift in the energy landscape is inevitable and hydrogen could play a significant role in helping India in achieving its ambitious targets of decarbonisation, reduce dependence on fossil fuel imports and improve energy security.

In terms of the investment requirements, if India is to deploy green hydrogen as a clean energy solution for key sectors, including transport, industry and power, by 2050, this would require significant investment in electrolyzers. India should focus public money for R&D and technology development to try and be on the global frontier in each part of the value chain of green hydrogen, with the objective of lowering costs and increasing deployment.

This requires a coordinated push from the supply-side, with increased investment and R&D commitments by government and industry, as well as demand-side support in the form of guaranteed markets, enabled by government procurement, subsidy schemes or regulations on fossil fuel alternatives.

To ensure success, significant commitments under a National Mission, along with effective public-private partnerships, are required; there would be little point in a sub-optimal effort that fails to mobilize sufficient resources. With a renewable energy target of 500GW for 2030 and net zero by 2070, India could become a hydrogen hub as it is a promising opportunity. Industry experts are hopeful that green hydrogen will play a huge role in nonabate sectors but we are first exploring the low hanging fruits. They are looking in phases at replacing grey hydrogen as a feedstock and carrier. For a developing country like India, affordability is a huge factor. Therefore, while targets are there, we need to redefine the clear roadmap.

By 2050, nearly 80% of India's hydrogen is projected to be green, produced by renew[1]able electricity and electrolysis. Green hydrogen may become the most competitive route for hydrogen production by around 2030.

This may be driven by potential cost declines in key production technologies and in clean energy technologies such as solar PV and wind turbines.

 There is a need for a Make in India policy support to maximise domestic manufacturing content across all parts of the value chain, including joint ventures with multinational companies. Apart from that we need policies to create a guaranteed market for hydrogen technologies, where they are not yet at cost parity with fossil-fuel equivalents, for example in the steel sector.

While many players are looking at pilots in railways and steel, there is equally the need to create an ecosystem for development of green hydrogen and its consumption. For India to make a transition to hydrogen technologies as well as creating manufacturing hubs will require a clear roadmap. A bouquet of measures including regulations and R&D will become major components of this roadmap.