In meeting the challenge of the major national issues of energy security and decarbonisation of the environment, India is embracing renewables and storage. But where does hydrogen sit in its energy mix— Dipak Sen Chaudhuri looks at the game-changing potential of the technology.
On 15 August, India’s prime minister Mr Narendra Modi, in his address to the nation to mark the 75th Independence Day of India, announced from the ramparts of the historic Red Fort of New Delhi the launch of ‘India’s National Hydrogen mission’.
A signatory of the 2016 Paris Agreement, India— the world’s then third-highest carbon emitter— had volunteered to reduce greenhouse gas emission intensity to between 33-35% by 2030, from 2005 levels, increase non-fossil fuel power to 40% from 28% and substantially boost forest cover to reduce carbon dioxide.
In this pursuit, the claim today is that the country is already substantially ahead of the curve. And now, prime minister Modi has declared: “The thing that is going to help India with a quantum leap in terms of climate is the field of green hydrogen. We have to make this country a global hub for green hydrogen production and export.”
It was almost as if they were waiting for a cue; India’s twin billionaire entrepreneurs jumped into the ring immediately after prime minister Modi’s pronouncement. Speaking at the International Climate Summit 2021, during the early part of September, the scion of the Ambani family (who owns the Reliance Group of Industries) Mr Mukesh Ambani announced his 1-1-1 vision of green hydrogen economics— 1kg of hydrogen to cost $1 in one decade from now (read, by 2030).
Earlier, the Reliance Group had announced a $10 billion investment in green-energy initiatives that included: the setting up of a ‘Giga’ facility dedicated to green initiatives that would include the manufacture of solar panels, advanced chemistry batteries, and electrolysers to produce green hydrogen, and finally fuel cells for both motive and stationary applications. When fully operational, the projected output has been declared as 100GW of renewable energy, which can obviously be tapped for green-hydrogen generation at a cost of $1/kg.
The other twin Mr Adani, not to be left un-noticed, announced an even bigger investment— $20 billion— again, with green hydrogen at the centre of his plans. The Adani group currently owns 25GW of renewable generation— either operational or under-construction— and strongly claims the aforesaid investment of $20 billion, spread over the next ten years, would allow them to emerge as the single largest operator in the renewable energy space by 2030. And that would also include the country’s largest green hydrogen-producing plant.
Green energy initiative
Shaken up by the big-ticket plans of the big private players, state-owned organisations in the fields of energy and oil have also quickly announced their own aspirations. The government department Indian Oil Corporation— the oil and gas behemoth of the country— has come out with their plans of setting up the nation’s first green hydrogen plant in its own refinery in Mathura, wheeling in wind power generated in the neighbouring state of Rajasthan.
In fact, Indian Oil is already in the process of setting up four, one-ton/day hydrogen-producing pilot units, each with a differentiated technology. The company plans to leverage their existing compressed natural gas (CNG) pipeline grid infrastructure to reduce the cost of hydrogen transportation to nearby cities. The idea is to run buses in these cities powered up by a blend of CNG and hydrogen.
The list of green hydrogen aspirants goes on. NTPC— the state-owned thermal power generating company— who has in recent years ventured into renewables— has also announced their ‘Green Hydrogen Mobility’ mission in the high altitudes of Leh and Ladakh, the northern-most border states of the country.
They plan to run five buses powered by green hydrogen produced with their own solar plants. Another giant, the Indian Railways, has launched a bid to run ‘Hydrogen Fuel Cell’ based trains.
Clean energy strategy
So, what’s happening? It all started to pick up pace once the EU announced their Clean Hydrogen Strategy in 2020. The EU strategy divides the approach in three distinct phases.
Phase one target is installation of 6MW of electrolysers and production of one million tons of green hydrogen, dedicated to decarbonising existing non-green hydrogen generation consumed mostly in chemical industries, refineries, and steel plants.
The second phase, between 2025 and 2030, would see the installed base rise to 40MW of electrolysers and 10 million tons of clean hydrogen to cater to the increasing demand as green hydrogen production cost hits parity with that originating from fossil fuels even with CO2 capture. Scale is expected to play a decisive role in electrolyser costing and eventual availability of green hydrogen at $2/kg.
In the final phase, stretching between 2030 and 2050, massive deployment of green-hydrogen facilities along with local renewable sources are expected across the globe, particularly in terrains difficult to approach; and up to a quarter of all renewables to be produced would be in the form of green hydrogen.
It is within this backdrop one needs to put the Indian aspirations in the right perspective.
The International Energy Agency has forecast that India’s power demand will grow more than any other country in the world in the next twenty years, driven by the fast-expanding economic activities and urbanisation.
The country certainly needs to boost her overall power generation capacity in a big way and in a relatively short period of time. The International Energy Agency has forecast that India’s power demand will grow more than any other country in the world in the next twenty years, driven by the fast-expanding economic activities and urbanisation. In this context, the planning is to go for renewable energy in a very, very big way and the first target has been set at 450GW by 2030. By 2020, India crossed the mark of 100GW and is expected to double the capacity in two more years.
The near frenzied pace and scale at which the country is moving towards solar, has also resulted in a marked drop in renewable energy cost, the latest projects working towards a figure of $0.03 cents per unit. Being a tropical country abundantly endowed with sunshine for a greater part of the year, as well as having one of the longest coastlines, puts the country in a very strong position to go for renewables, both solar and wind, particularly when it is available at such extremely attractive costs and with no carbon consequence.
Renewables need storage
However, renewables-generated power needs storage. Very big storage. It is on this point the government has taken the strategic initiative to incentivise entrepreneurs, from anywhere in the world, to invest in setting up manufacturing facilities in India in two key technologies: advanced chemistry storage cell technology and green hydrogen production infrastructure.
While the first initiative is primarily focused on all mobility solutions, as well as for stationary energy storage systems (ESS), the second initiative would be targeting specific applications where the prospect of having an economic ‘E’ solution remains a challenge. These would include, amongst others, long-distance transportation, as well as oversized vehicles, industry— refineries, fertiliser etc— and bulk storage of renewable energies. This is where hydrogen is expected to be a game-changer.
Regarding the first of the two incentive programs, I have already written in an earlier edition of BEST. Now, for the second initiative too the government has announced a ‘Production Linked Incentive’ scheme for electrolysers manufactured in the country with a specified percentage of indigenously produced/sourced components. Manufacturers setting up facilities for electrolyser production in the country will be entitled to a quantum of government subsidy proportionate to the number of units sold by them. The subsidy percentage is attractive and can have a significant role in bringing down green hydrogen cost.
The supply side being well taken care of by the abundant availability of very low-cost renewable energy and the incentive scheme for electrolyser manufacture, it is now time to manage the demand side.
This is where the currently nascent hydrogen chain in the country will have to go for a significant change, and that will not just include hydrogen production but also include storage and transportation. The government regulatory authorities would perhaps need to incentivise some of the heavily polluting manufacturing and transport sectors to switch over to hydrogen. Unnamed sources confirm there is a plan being worked out to implement a ‘Green Hydrogen Consumption’ obligation similar to what is already being done with renewable energy purchase obligations.
At its most conservative, the minimum estimated hydrogen demand in the country will be 12 million tons by 2030, and that will be a lot of carbon, unless it is green.
At its most conservative, the minimum estimated hydrogen demand in the country will be 12 million tons by 2030, and that will be a lot of carbon, unless it is green. The compulsion to go for green hydrogen is therefore enormous, if India is to be in line with the Paris agreement commitments.
Finally, one must remember, hydrogen is not an energy source. It is an energy carrier only. The primary sources are the renewable options. India has landed up with a very efficient renewable solution that only, at the back end, gives the hope of affordable hydrogen.
It is extremely important that the renewable assets in the country keep growing and sustain their efficient performance over a projected 25 years of service life. Green hydrogen production on the other hand has its own technical challenge as, realistically, it is technology that is only at its infancy. Nevertheless, it’s worth a try as it addresses two major national issues— energy security as well as decarbonisation of the environment. It’s better to start now, as India has done.
