Harness the potential of Hydrogen in Rebalancing the Energy Portfolio of India

Harness the potential of Hydrogen in Rebalancing the Energy Portfolio of India

This impetus for India’s hydrogen transition initiatives must be viewed from the perspective of the country’s larger goals for economic development, energy security, and a low-carbon economy

  • By Sachin Kulshreshtha and Shubham Mishra , Head - Hydrogen Development , Avina Clean Hydrogen | August 21, 2023

Hydrogen in India has been used for decades in significant consumption sectors like refining, ammonia, and methanol. It is not a new entity that has suddenly boomed. However, geopolitical perspectives and technological upgradation has placed hydrogen as the next generation fuel for the future. Traditionally, hydrogen has been used mainly as a feedstock in India and globally and is produced through fossil fuels. It is called grey hydrogen.

With growing concern for climate change and increased focus on renewable energy generation, electrolyser technologies have gained the attraction to produce hydrogen using renewable electricity and water. This hydrogen produced is called Green Hydrogen.

Besides being traditionally used as a feedstock, hydrogen has emerged as a clean energy vector to support India’s deep decarbonization strategy. It finds its application in decarbonizing hard-to-abate sectors, such as steel, chemicals, long-haul transport, shipping, and aviation. It also enables direct electrification at places where it is most challenging.

Hydrogen Demand in India

In 2020, the hydrogen demand in India was ~ 6MMT which was ~8% of the global hydrogen demand. According to current predictions, India's hydrogen demand might increase more than fourfold by 2050, accounting for close to 10% of the world's hydrogen needs. Understanding the decarbonizing potential of green hydrogen, its share in total hydrogen demand can increase significantly. Ease of Adoption and Cost of Adoption will dominate the pace of transition to a green hydrogen-based economy.

Currently, the demand for hydrogen in India is mainly from fertilizers, chemicals, and refineries. However, this demand is expected to expand with potential sectors, including power generation, energy storage, grid stability, heavy-duty transport, steel, and cement industries. A significant portion of this escalating hydrogen demand should be fed by green hydrogen. As per India’s national green hydrogen mission, it is expected to produce 5 MMT per annum of green hydrogen. Depending upon the export market condition, it will expand to even 10 MMT per annum by 2030. On a base level of green hydrogen production scenario of 5 MMT in India, about 50 MMT of annual CO2¬ will be able to get abated.

 Strategic importance of Green Hydrogen in India

This impetus for India’s hydrogen transition initiatives must be viewed from the perspective of the country’s larger goals for economic development, energy security, and a low-carbon economy. The rapid adoption of a higher percentage of renewable energy sources in the electrical grid and the electrification of end users like transport are essential to India's efforts to transition to a low-carbon economy.

However, it is implicitly acknowledged that certain substances, such as steel, ammonia, cement, and plastic, essential to industrialization and urbanization and cannot be decarbonized by electricity alone, have no replacements. The key to achieving a real low-carbon economy is green hydrogen. In the figure below, Power, Industry, and Transport sectors contribute to the highest levels of CO2 emissions. The introduction of green hydrogen in these sectors will help in decarbonization.

This transformation may benefit India, given its renewable energy sector’s size, scope, and economic competitiveness. In contrast to fossil fuels, green hydrogen may be created anywhere there is a large amount of renewable potential. India is fortunate in that regard. This will enable a domestically produced energy carrier to emerge, eliminating reliance on imports for vital energy inputs like natural gas and petroleum.

Potential domains for development in the Green Hydrogen value chain

The complete value chain for the green hydrogen economy includes production, storage, supply, research and development, export, component manufacturing, and domestic application. For India to leverage the existing renewable energy potential and evolve as a global leader in green hydrogen, focus on production and export will be crucial. Research and development will be the key to reducing the current cost of green hydrogen and making green hydrogen prices competitive with grey hydrogen. The supply/transportation of green hydrogen is another critical issue where a lot of focus is needed.

The figure below details how India is leading forward with the strategies for developing a green hydrogen value chain. The areas of component manufacturing, storage, and domestic application are kept under mild level strategy as the Indian markets for the uptake of green hydrogen are growing slowly, and there is an immediate need to introduce the right policies and mandates.

Role of Policy Making to boost Green Hydrogen development

Over the past few years, the role of hydrogen as a new energy vector for hard-to-decarbonize sectors has significantly been recognized. This, however, depends entirely on sustainable hydrogen production while ensuring safety, affordability, and availability. Globally, Green and low-carbon hydrogen has been strategically added to their hydrogen policies, roadmaps, and strategies.

Polices can be the backbone of the growing hydrogen economy. Governments and diverse stakeholders are already working to find effective policies to include the role of hydrogen in the clean energy transition. These policies should be designed exclusively oriented toward the priorities and constraints of the country. This provides resource availability, infrastructure requirements, and expected investment and growth. This article has identified major six areas for consideration by policymakers.

Demand creation: The demand creation for green or low-carbon hydrogen is crucial. Policies favoring demand creation can be a major push to encourage its early adoption as a clean energy vector.

Financial support: Policy framework based on Risk share model is required to mitigate investment risks across the complete hydrogen value chain and to support public-private partnerships for fast roll out of green or low-carbon hydrogen. It will reduce the pressure on the government and mitigate risks for public and private sectors participating in this nascent industry.

Technology and scale of manufacturing: Policy steps like promotion of R&D, knowledge sharing, technology transfer, international collaborations, joint demonstration projects, innovation, and scale of manufacturing are the key drivers that essentially lead to drive down the levelized cost of hydrogen and promoting the competitiveness amongst various hydrogen technologies.

International trade: Policies are required to support international trade that can ease the risk related to uncertainty in domestic demand. It will further boost investors’ confidence and ensure that the demand for green or low-carbon hydrogen at the global level can be met. International partnerships, harmonization of standards and certification, and development of hydrogen hubs /valleys near to the ports can be some of the initial steps to boost international trade.

Harmonization of global standards and certification: To ensure clean practices, promote international trade, and boost confidence among consumers, developers, and investors in green or low-carbon hydrogen markets, it is required at policy making level to establish globally accepted standards, regulatory framework, and hydrogen certification system.

Skill development: New skilled and unskilled workforce is required in big numbers during this Energy Transitioning to green or low-carbon hydrogen. It is perceived that this can be achieved by leveraging existing skills and developing new skills among the workforce across the hydrogen ecosystem, including industries, academia, and government. Training, apprenticeship programs, workshops, and the introduction of new educational courses can be some major steps that can be taken to support skill development at the public and private level.

Latest Development across Green Hydrogen economy

India has recognized the critical role of Green Hydrogen in its energy transition mission and set its sight on becoming energy independent by 2047 and achieving Net Zero by 2070.

India sets its National Green Hydrogen mission to provide a comprehensive action plan for establishing a Green Hydrogen ecosystem and catalyzing a systematic response to the opportunities and challenges of this sunrise energy sector.

An initial financial outlay for the Green Hydrogen Mission will be INR 19,744 crore, including an outlay of INR 17,490 crore for the SIGHT program, INR 1,466 crore for pilot projects, INR 400 crore for R&D, and INR 388 crore towards other Mission components. The Ministry of New and Renewable Energy will formulate definitive schemes and guidelines for the directional implementation of the respective components of financial outlay.

This will help in creating over six lakh jobs across the sector and cumulative reduction in energy import bill by over one lakh crore.

At the conclusion, the author believes that future of India’s New Energy sector is promising in all aspects that it will provide India a robust platform to excel in latest advancements of the technologies, catering to good and healthy life for the generations to come.


Register Now to Attend NextGen Chemicals & Petrochemicals Summit 2024, 11-12 July 2024, Mumbai

Other Related stories