India’s quest for hydrogen “strewn with pitfalls”

India is turning to green hydrogen as a cleaner form of energy, while continuing to explore options to reduce its reliance on imported, highly polluting fossil fuels.

But before green hydrogen can diversify the country’s energy mix, the country must generate enough renewable energy to produce the fuel, invest in hydrogen infrastructure, secure green financing and ensure the financial viability of the economy. hydrogen.

The potential is huge, but analysts say the road is long and rocky.

“India is expected to witness exceptional growth in the use of green hydrogen and it is expected that hydrogen will occupy a significant share of Indian energy solutions, which effectively address the country’s energy security,” Manish Dabkara said. , CEO of EKI Energy Services, a sustainability and climate change consultancy.

“Because green hydrogen is a highly reactive fuel, its storage and transportation will require technological innovation and a flow of green finance,” he said.

India, the world’s third-largest energy consumer, wants to reduce its dependence on fossil fuels, which are costly for the country both financially and environmentally.

They have inflated its import bill and play a major role in ranking some Indian cities among the most polluted in the world.

With energy demand only expected to increase as India’s economy grows, it is all the more crucial for the country to increase its production of green energy and clean fuels.

“Green hydrogen is one of the cleanest energy carriers, and its use would allow India to reach its emissions targets much faster than relying only on alternative fuels like ethanol. , or biofuels, or electricity stored in batteries,” says Ashwini Kumar, a lawyer and climatologist. advocate who consults on the decarbonization of industry.

Analysts say Russia’s war in Ukraine, which has rocked global oil markets, has only underscored the urgency for India to diversify its energy mix. Crude, which hit a 14-year high of nearly $140 a barrel last month, has given up some gains but is still more than 32% higher than it was at the start of this year.

“Green hydrogen is an emerging option that will help reduce India’s vulnerability to such price shocks,” says Amit Bhandari, senior researcher for energy, investment and connectivity at Gateway House, a group reflection on foreign policy in Mumbai.

This year, the Indian government has started to present its national mission on green hydrogen, which was announced by Prime Minister Narendra Modi last year with the ambitious goal of eventually making “India a global hub for the production and export of green hydrogen”.

In February, the country’s energy ministry said it plans to produce five million tonnes of green hydrogen per year by 2030. Currently, green hydrogen is not produced on a commercial scale. in India.

“India really wants to be self-sufficient from an energy point of view…it wants to reduce crude imports, it wants to contribute to climate mitigation goals,” says Gaurav Kedia, president of the Indian Biogas Association.

“Green hydrogen fits very well” into the government’s strategy, because “it’s clean and it can be easily accessible,” he says.

Green hydrogen is produced by using renewable energy to generate hydrogen by electrolysis of water.

It can be used to decarbonize sectors considered difficult to clean, such as steel and transport. Green hydrogen can also be used as a means of storing energy produced from renewable sources, including wind or solar power, which could otherwise be wasted.

The International Energy Agency predicts that the country will account for the largest share of energy demand growth over the next two decades, as its energy consumption is expected to nearly double.

New Delhi has also made global commitments under the Paris agreement on climate change and at COP26 to reduce its carbon emissions. India aims to be carbon neutral by 2070 and green hydrogen could help achieve these goals, according to industry experts.

“It’s one of the cleanest sources of energy,” says Louis Strydom, director of projects and market development, Middle East and South Asia at Wartsila Energy, which is working on the adoption of the hydrogen and ammonia as viable engine fuels through advanced testing at its labs in Finland.

“Green hydrogen is already showing enormous potential as a fuel molecule in manufacturing, transportation and other heavy industrial activities. It produces a minimal carbon footprint since its by-product is water.

Green hydrogen “can become the cornerstone of a decarbonization strategy” in India, he says.

Most of the hydrogen currently used in the world is gray hydrogen, which is extracted from fossil fuels in a process. Almost all hydrogen produced in India is grey.

India is aiming for almost 80% of its hydrogen to be green by 2050.

The country has outlined plans to encourage production by creating separate manufacturing zones and offering incentives for the assembly and manufacture of electrolysers. It also committed to waiving interstate electricity transmission fees for 25 years and providing priority electricity grid connectivity to green hydrogen producers.

With plenty of incentives, some of India’s biggest companies are already joining the government’s push towards green hydrogen.

Their role will be key in attracting investment and reducing the costs of producing green hydrogen, the two main hurdles India must overcome to achieve its policy ambitions.

“In addition to government-backed actors, the hydrogen economy will need the participation of the private sector,” says Mr. Bhandari. “The government’s green hydrogen policy sends the right signals of its intent. He must now ensure that investments can freely enter this space.

Reliance Industries, an oil conglomerate controlled by India’s richest man, Mukesh Ambani, is working to reduce the cost of green hydrogen to $1 per kilogram within a decade, about a fifth of its current average rate.

Gujarat-based multinational Adani Group is also working on green hydrogen projects and has set out its ambitions to become one of the world’s largest producers.

Last week, state-owned Indian Oil Corporation, multinational infrastructure developer Larsen & Toubro and renewable energy company ReNew Power announced that they would form a joint venture to develop green hydrogen projects in India.

“India plans to make rapid progress in its decarbonization efforts and the production of green hydrogen is key in this endeavor,” said SN Subrahmanyan, Managing Director and Managing Director of L&T.

The joint venture “will focus on developing green hydrogen projects within a limited time frame” to supply the fuel on an industrial scale, he said.

Hydrogen is widely used in the refining, steel and fertilizer sectors, and these are the areas the JV will initially focus on, the companies said in a statement at the time.

To fill a major gap in the country’s green hydrogen manufacturing capacity, IndianOil and L&T said they are also teaming up to manufacture and sell electrolyzers, which are essential for producing green hydrogen.

“The green hydrogen sector is relatively new compared to other energy sources,” says Strydom.

“Making such a radical change in your energy mix requires active coordination of investments and policies. Scale is critical, and to achieve this, private sector investment and government policy and support will need to work hand in hand to achieve feasibility.

In addition to electrolysers, generating green hydrogen requires clean water and green electricity for the electrolysis process.

But renewable electricity for green hydrogen production is the “main challenge for a country like India, which faces extremely high electricity demand without adequate supply,” Kumar said.

“India cannot afford to divert its electricity for green hydrogen production unless the electricity generated exceeds demand.”

The government’s commitment to a greener future was, however, underscored last month when Transport Minister Nitin Gadkari arrived in parliament in a hydrogen-powered green car, demonstrating that the fuel could have a role to play in India’s desire to increase the use of greener vehicles. .

There is still a long way to go, but India has a huge green hydrogen opportunity, analysts say.

“India will need to develop cost-effective solutions for storing and transporting green hydrogen to increase its scalability, which may otherwise limit the growth of the hydrogen economy in the country,” said Mr. Dabkara.

If these and other challenges are “effectively addressed, it will be a boon for India’s quest to decarbonize its development”, he says.

Updated: April 11, 2022, 5:30 a.m.