Green hydrogen, which is hydrogen produced by the electrolysis of water using renewable energy sources, has perhaps become the most sought after clean energy technology. With its versatile range of applications, from energy generation and storage to transport, it is undoubtedly a key piece of the energy transition story. As countries worldwide strive to deploy large-scale green hydrogen projects and develop the most cost-effective technologies, India too is joining the bandwagon, with a slew of policy interventions and projects. At a recent conference organised by Renewable Watch, industry leaders discussed the key trends, challenges and outlook for developing a competitive green hydrogen market in the country. Edited excerpts…
Hydrogen is no longer the fuel of the future; it is the fuel of today. There are discussions regarding the type of hydrogen to be used and developed. Considering the global perspective and the ambitious strategies being developed for the production and use of green hydrogen, it is imperative to focus more on this cleaner alternative. The big question is regarding the cost of green hydrogen, which depends on the source of the energy used to produce it and the cost of the electrolysers. Following from this, another important question is regarding the source of the hydrogen. Should it be sourced from solar or wind energy, or should blue hydrogen, which uses carbon capture technologies, be the priority? As the cost curve will continue to fall steeply for green hydrogen, going forward, it should be the priority. However, it is true that blue hydrogen will continue to complement the uptake of green hydrogen. I see a fast transition towards green hydrogen. It will start competing with other energy sources in the next four to five years.
Hydrogen has multi-pronged applications. It can be used for power storage and generation, transportation, and in the fertiliser industry. Hydrogen blending of natural gas is also a promising opportunity, given that India imports the bulk of its gas needs. Globally, interesting developments are taking place in the shipping, aviation and railway sectors regarding the use of hydrogen fuel cells in a bid to decarbonise these industries. We completely agree with the government’s stance that a mandate-based approach is the way forward for promoting hydrogen. A policy framework is needed, and the Indian government is working towards that.
ACME has been discussing opportunities with various stakeholders and government agencies in this space. ACME is involved in building a small-scale, integrated commercial green hydrogen and green ammonia pilot project in Rajasthan, which will be commissioned within the next two to three months. Green ammonia has huge potential not only as a feedstock for power plants, but also for the transportation of hydrogen over long distances, which is a huge challenge. The cost will initially be a challenge for the pilot. But, going forward, the cost of such projects will fall if the demand problem for hydrogen is solved. In the green hydrogen value chain, apart from production of hydrogen, there is also immense potential for companies to act as integrators. Overall, the global fall in the costs of electrolysers will benefit India as well. ACME will build integration models to bring down the cost of green hydrogen, so that it can compete with other energy sources.
India has a target of setting up 450 GW of renewable energy projects by 2030. India’s peak energy demand is in the range of just 180-190 GW. It is not expected to increase in sync with these ambitious targets in the next 10 years. In this scenario, there is a possibility of the renewable energy capacity sitting idle. To utilise this capacity by creating additional demand, the production of green hydrogen will be important.
In terms of technology, alkaline electrolysers have been commonly used and universally accepted by many companies. Polymer electrolyte membrane (PEM) electrolysers are not as mature as alkaline electrolysers, but are now slowly becoming commercially feasible. Major research and development activities are being witnessed for solid oxide electrolysis cells, which are considered to be the most efficient electrolysers.
Going forward, three suggestions for the government are: one, to continue its focus on adequate policies for the hydrogen segment and to gradually move ahead with projects as the pilot stage matures; two, to create demand for green hydrogen and green ammonia in India, which can only happen when mandates akin to renewable purchase obligations are in place; three, to facilitate more government-to-government agreements and tie-ups, which are needed to ensure India takes the lead in the export of hydrogen.
Dr R.K. Malhotra
Hydrogen is the ultimate carbon-free fuel. It has often been dubbed “the fuel of the future”, but this isn’t valid any more, as its production is being scaled up across the globe. In the pursuit of reducing carbon emissions to combat climate change, a hydrogen-based economy is inevitable. The renewable energy push in India has been incredible in recent years, especially for solar energy. These efforts have gone a long way in controlling carbon emissions, and harnessing hydrogen can only help this further. Hydrogen can be a storage medium. In place of storing variable renewable energy in the form of batteries, one can store it in the form of hydrogen and distribute it using fuel cells.
In the future, blue hydrogen can play a big role in reducing carbon emissions until green hydrogen becomes cost competitive, with proper incentives in place. This can be done by capturing carbon from the petroleum industry and using it to complement the development of green hydrogen infrastructure. Oil and gas companies will be involved in the distribution and supply of blue hydrogen, as they will find the hydrogen from refineries to be competitive, at least in the short run. When it comes to utilisation, the transportation cost of hydrogen is high. Thus, if you are generating hydrogen at a particular place, it is best to find applications for it in close proximity to the plant.
It must be noted that hydrogen is quite safe, as it is a very light fuel. If it leaks from the tank, it will go up into the atmosphere, unlike petrol vapours, which could spread to the ground. The only concern is that it will have to be stored under very high pressures, and so these pressures and the vessels in which it is stored must be checked and tested. In the US, carbon fibre is often used for cylinders that store hydrogen at up to 650-700 bar. In India, however, we only store it at 150-250 bar. Thus, there is potential to follow the practices of the top nations that store and distribute hydrogen. What is more important, at present, is public education about the fact that hydrogen fuel is by no means dangerous.
The green hydrogen production cost has been estimated to be the lowest when biomass fuel is used, at this point in India. While biomass gasification cost and the production cost of hydrogen vis-à-vis electrolyser costs are coming down, biomass collection is challenging. At the same time, the cost of solar power has come down substantially. Both options seem promising, and which one will ultimately succeed is hard to determine. It depends on the cost trends of biomass and solar power, as well as the level of advancement in electrolyser technology.
There are not many barriers to bringing in technology or producing hydrogen. The only thing that needs to be done is the creation of demand centres and supply and distribution centres. People have to be ready to use hydrogen, and there must be a supply/distribution system in place. For example, unless people adopt fuel cell vehicles, hydrogen cannot be sold to the public. Further, steel and ammonia plants need to be convinced that hydrogen makes better sense for them. Ultimately, unless carbon taxes are implemented, it will take some time before green hydrogen becomes economical. The government will also have to encourage the energy companies, who must be offered incentives for fuel cell vehicle production.
Without a shred of doubt, green hydrogen has enormous potential in India. The only worrisome trend at this stage is that the current environment is not very encouraging for large private players to foray into this space. Being one of the largest renewable energy independent power producers in the country, Greenko has been seriously exploring and considering venturing into the green hydrogen sector. Our plans are still in the formulation stage, as the policy environment is not very encouraging at present. There are other issues as well with respect to its commercial viability and the lack of attractive business models. Further, India is lagging behind significantly in terms of standards. Thus, despite Greenko’s interest and endeavours to venture into this space, the company is facing a lot of roadblocks from many angles.
As far as the company’s strategy is concerned, the main aspects that we are exploring currently are energy storage and transport, and we are actively formulating growth plans in these specific
areas. However, India is lagging behind several countries in addressing various issues associated with the availability and cost competitiveness of electrolyser technology, and innovations in this space. Rapid advancements are occurring across the globe in this space, and India needs to jump on the electrolyser bandwagon in a big way so as to create an enabling domestic market.
At present, most discussions in India’s green hydrogen space are focused on growth opportunities and capacity development by the year 2030, as the focus will be only on developing pilot projects for the next four to five years, and commercial viability is expected only around 2030. Thus, if India capitalises on this opportunity and develops an enabling domestic electrolyser market early, the business case for large-scale uptake of green hydrogen will become stronger in the years to come. The Indian government is quite keen on developing a green hydrogen ecosystem in the country, and a bid is expected in the next few months. The bid provisions need to be designed in such a manner as to encourage development of green hydrogen infrastructure, while being commercially viable for developers.
Another concern is regarding the efficiency of green hydrogen, which is directly linked to its marketability and commercial viability. Currently, hydrogen ranks quite low in terms of efficiency when compared to other technologies. However, a lot of research and development is being carried out, and we expect improvements in efficiency in the near future with technology advancements.
We feel that in the Indian context, solar and wind power are going to play equal roles in green hydrogen production. Solar power tariffs have already dropped to an all-time low, which is quite encouraging for large-scale green hydrogen production. On the wind side as well, tariffs have dropped. However, utilisation of wind power for green hydrogen production will also depend to a large extent on offshore wind development in the country. Thus, in India, green hydrogen production will most likely be driven by solar power initially, with wind power catching up shortly. As far as Greenko is concerned, the company has already taken measurable steps towards flexible renewable energy generation, with energy storage as a major component and green hydrogen to play a major role in the future.
India has an advantage in terms of cost of renewable power. It has some of the lowest renewable tariff rates in the world. Renewable energy availability drives the economics for electrolysis, which is used to produce hydrogen. Low-cost electricity is critical to consider when investing capital for carrying out electrolysis. An electrolyser can be used many times throughout the day in India, which bodes well for setting up green hydrogen. Another critical aspect to consider is how to utilise oxygen, which is a product of electrolysis along with hydrogen. There are many applications for oxygen in industries such as steel mills and cement plants. Finding a place where the oxygen produced can add value could help improve the cost economics of hydrogen production and drive down its cost. We see India becoming a really attractive market. Coupling the industrial use of oxygen with the ability to produce hydrogen, and getting economic benefit from both products coming out of the electrolyser, is a significant way to fully realise the potential of hydrogen production.
In terms of technology, there are mainly two types of electrolysis: PEM electrolysis and alkaline electrolysis. Alkaline electrolysis is a more mature technology and declines steeply in terms of cost, especially compared to PEM. If dynamic response is not important, alkaline electrolysis is a more favourable option for hydrogen production due to its lower cost. In cases where demand response and grid control are required and electrolysers need to be turned off and on again, PEM is more favourable, although it is currently more expensive. However, as PEM is scaled up, the material costs associated with it, such as the membrane electrode assembly cost, can be expected to decline eventually with an increase in material demand.
Hydrogen production technology is constantly evolving. The US has the advantage of low-cost natural gas and has large steam methane reforming (SMR) units that can produce about 250,000 kg per day. As the petroleum industry starts to diminish, this hydrogen capacity is likely to be stranded. To keep that from happening, blue hydrogen can play a big role, enabling continued usage of the existing assets, which produce gaseous hydrogen at $1.2 to $1.5 per kg. With large-scale units and the addition of carbon capture to the existing SMR units, blue hydrogen could be the bridge to green hydrogen. As the technology evolves, the cost of green hydrogen will come down, especially with larger MW-scale electrolysers being commissioned. In the interim, especially in the US, where we already have large-scale SMRs, blue hydrogen can be produced to facilitate the eventual move to green hydrogen.
Among the existing renewable energy technologies, offshore wind will likely become a more probable resource for green hydrogen production in the coming years, since there is limited land, which will eventually be exhausted. One of the main drivers for hydrogen energy and fuel cell electric vehicles are policy initiatives. These include policies supporting clean energy targets, functioning carbon markets, low-carbon-fuel standards and vehicle mandates. These policy initiatives help push clean energy technologies such as green hydrogen production. There are also a lot of voluntary initiatives by corporations such as Microsoft and Amazon, among others, that are facilitating clean energy and hydrogen as part of their environmental sustainability goals. There is also a need to take down barriers in terms of understanding and putting in place codes, standards and regulations that allow for the installation and siting of hydrogen production facilities and hydrogen refuelling facilities. The biggest challenge, especially in the US, has been getting communities to adopt hydrogen. Communities are hesitant in taking up hydrogen, since there are a lot of pre-conceived ideas and notions about the safety of hydrogen production and use. If these are addressed properly and standards put in place, hydrogen uptake can increase in the coming years.