In a report entitled ‘Harnessing Green Hydrogen – Opportunities for Deep Decarbonisation in India’, NITI Aayog has stated that given the benefits that green hydrogen holds for India, the nation must take genuine action in order to make full use of the possibilities.
The report, which was released by NITI Aayog and independent non-profit RMI, offers 10 doable actions that can serve as a roadmap for a national action plan on green hydrogen. These include:
• A detailed roadmap focused on all aspects of Green Hydrogen.
• Intervene on the supply-side to reduce the cost of green hydrogen to $1/kg.
• Establish mandates and provide incentives to achieve a green hydrogen production capacity of 160 GW.
• Build manufacturing capacity totalling 25GW by 2030 coupled with supportive manufacturing and R&D investments.
• Initiate green hydrogen standards and a labelling programme.
• Promotion of exports of green hydrogen and green hydrogen-embedded products through a global hydrogen alliance.
• Facilitate investment through demand aggregation and dollar-based bidding for green hydrogen.
• Encourage state-level action and policy-making related to Green Hydrogen.
• Encourage capacity building and skill development.
• Construct an inter-ministerial governance structure.
NITI Aayog said India needs to create Green Hydrogen Corridors and governments may consider funding companies and encouraging entrepreneurs to spread the word about green hydrogen. Additionally, it was suggested that demand aggregation and dollar-based bidding for green hydrogen are necessary to encourage investment.
“Three hydrogen corridors to be developed across the country based on state grand challenge,” NITI Aayog added.
The report also says: “Government expenditure and publicly owned bodies are crucial to every stage of technology innovation due to longer-term investment outlooks and greater tolerance for uncertainty. Governments can provide grants and loans to start-ups and projects, support entrepreneurs through incubators and investor networks, and put in place regulations that manage first-mover risks.”
It added: “They are crucial source for concessional finance to bridge markets and support scale-up. Government can also use public procurement and purchase incentives to create demand in niche markets and crowd in private investment.”
However, the report noted that due to high costs, a complicated supply chain, legislation, and laws, the development of a hydrogen economy has proven difficult.
Compared to hydrogen made from fossil fuels, green hydrogen production is far more expensive. Green hydrogen will eventually become economically viable because of falling renewable energy costs and economies of scale, but there is still more work to be done. When compared to oil and gas, hydrogen’s sourcing and supply chain are more sophisticated because they may be manufactured using a variety of processes and is used in a range of industries.
In addition, transporting and storing hydrogen remains a significant hurdle that will necessitate significant infrastructural improvements.
The report highlighted that despite all the difficulties mentioned, hydrogen is progressively proving to be more economically advantageous than alternatives for certain use applications and as a result, a market for hydrogen is gradually developing.
Direct combustion, the production of electricity via fuel cells, or industrial operations that employ hydrogen as a chemical feedstock are all ways that hydrogen can be used to generate energy.
Transportation fuel for light-duty cars, buses, trucks, trains, and maybe cargo and aircraft are examples of direct usage, along with industrial processes in iron and steel plants and refineries, grid balancing, and co-firing in thermal power plants. In order to produce ammonia (used in the fertiliser industry), methane, and methanol, hydrogen is a necessary chemical feedstock.
The majority of developed nations, including India, have committed to net-zero goals.
One of the key requirements for emission reduction, particularly in the challenging to reduce sectors, is the switch to green hydrogen and green ammonia.
According to the analysis, India’s demand for hydrogen might more than quadruple by 2050, accounting for up to 10% of the world’s total consumption. It also added that steel and heavy-duty transportation are projected to be the main drivers of demand increase over the long term, making for over 52% of total demand by 2050.
Creating a need for hydrogen in the near future is being driven by industrial decarbonization (both energy and feedstock). But as per the report, the longer-term prospects exist in the areas of power, transportation, and even the decarbonization of the shipping and aviation sectors.
The report noted: “Hydrogen can help reduce the nation’s reliance on oil imports and bolster a domestic job market. Additionally, it provides the ability to participate in the ensuing global energy transition and the economic opportunity that transition presents.”
It also stated that currently, direct or indirect national government subsidies for hydrogen projects total over $11.4 billion annually. This indicates a rising desire to support the hydrogen economy, similar to the assistance provided to the solar and wind industries in recent decades.
The transformation may benefit India, given the size, scope, and economic competitiveness of its renewable energy sector highlighted in the report. It also added that green hydrogen, in contrast to fossil fuels which have resources and geographical boundaries, may be created anywhere with a large amount of renewable potential.
“India’s robust economy and manufacturing and industrialization ambitions present other opportunities to partake in the emerging global hydrogen economy. A robust market for green hydrogen translates to a growing demand for production and consumption technologies such as electrolysers and fuel cells and an opportunity for scaled manufacturing,” the report said.
However, a crucial aspect, according to the report, of this transformation is financing hydrogen production and use.
It said that for industry participants, risk mitigation measures are essential. Concessionary finance, education and capacity building for business, public and private institutions, and shared learning on technological readiness and demonstration projects can all be used to achieve this. These steps can boost industry and lender confidence and simplify this shift, together with specific support for domestic experimental projects.
“India has a unique opportunity to become a global leader in the hydrogen energy ecosystem. With proper policy support, industry action, market generation and acceptance, and increased investor interest, India can position itself as a low-cost, zero-carbon manufacturing hub, at the same time fulfilling its goal of economic development, job creation, and improved public health,” the report concluded.
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