Hydrogen, green hydrogen in particular, has become a critical area of interest across the world, including in India. There are various applications of hydrogen across sectors, most notably in petroleum refining and production of ammonia in the fertiliser industry. It is also being increasingly used as fuel in the transportation and power sectors. Green hydrogen, which is produced through electrolysis using electricity produced by renewables, is a game changer in decarbonising sectors where hydrogen can be used. India, which imports 85 per cent of its oil and 53 per cent of its gas demand, is well positioned to leverage this technology with its vast renewable energy potential and rapidly growing installed renewables capacity.
Recently, India reached the 100 GW mark in installed renewable energy capacity, excluding large hydropower capacity. Meanwhile, about 50 GW of capacity is under implementation and 27 GW is under tendering. This increasing installation of renewable power capacity has opened up the possibility of a green hydrogen-driven economy. To support this, a well-developed policy framework is also emerging.
On August 15, 2021, the prime minister of India announced the launch of the much-awaited National Hydrogen Mission. As per the prime minister’s address, India has set a target to achieve self-reliance in energy by the year 2047. This goal will be achieved by promoting a gas-based economy. Green hydrogen will help India make a quantum leap in terms of meeting its climate targets. The plan is to turn India into a global hub for the production and export of green hydrogen. This is expected to not only drive the country’s progress in the field of energy, but will also become a new inspiration for energy transition globally.
The hydrogen mission was proposed by the Finance Minister in February 2021 during the Union Budget speech for 2021-22 with the aims to accelerate plans to generate hydrogen from renewable energy. The Ministry of New and Renewable Energy (MNRE) had drafted and submitted a National Hydrogen Energy Mission document, which aimed to scale up green hydrogen production and utilisation across multiple sectors, including transportation. This document was submitted in May 2021 for interministerial consultations. The mission is expected to address the potential markets for green hydrogen by facilitating its generation and use.
A green mandate
There is a significant demand for hydrogen in the petroleum refinery and fertiliser production industry. The annual consumption of these segments is estimated at about 6.7 million tonnes, of which petroleum refining holds the majority share of about 53.7 per cent. Recently, the government announced its intent to make it mandatory for these industries to produce or procure green hydrogen as part of their operations. The MNRE has sent the proposal to the cabinet for approval. According to the proposed policy, refineries will have to use green hydrogen for meeting 10 per cent of their requirement with effect from 2023-24. The minimum requirement will rise to 25 per cent in the next five years. Fertiliser industries will have to use 5 per cent green hydrogen to start with, which will be extended up to 20 per cent. Once the proposal is approved, oil refineries and fertiliser manufacturers will be asked to implement the policy immediately. The policy is also proposed to be extended to other industries at a later stage. The steel industry is expected to implement this policy after two years to give it the necessary time to create the set-up required for implementation.
With green hydrogen gaining traction across the country, Indian companies are trying to seize the opportunity. Some bold moves have been made. Private companies such as Reliance Industries have announced plans to build an electrolyser giga factory and a fuel cell giga factory. Meanwhile, state-owned enterprises such as Indian Oil Corporation Limited (IOCL) and NTPC are also active in this space. In July 2021, IOCL announced its plan to build the country’s first green hydrogen plant at its Mathura refinery. Mathura has been selected because of its proximity to the Taj Trapezium Zone. Green hydrogen will replace fossil fuels used in the refinery to process crude oil into value-added products such as petrol and diesel. IOCL is also in the process of setting up pilot plants with a capacity of 1 tonne per day based on four innovative hydrogen production technologies, and is operating 15 fuel cell buses in Delhi NCR along with Tata Motors.
NTPC has started a pilot for making methanol by integrating carbon captured from power plant flue gas and hydrogen from electrolysis. Under this initiative, it is also exploring the use of hydrogen-based fuel cells and electrolysers for backup power requirement. Currently, the backup power requirement and microgrid applications are being met through diesel-based power generators. NTPC is working towards creating solutions that are a green alternative to diesel generators. NTPC Limited has also floated a global expression of interest notification to set up two pilot projects – a stand-alone fuel cell-based backup power system and a standalone fuel cell-based microgrid system with hydrogen production using electrolyser at NTPC’s premises. Through these projects, the utility is looking to expand its footprint in green and clean fuel. It will collaborate for the implementation and further commercialisation of the projects.
Green hydrogen in mobility
Beyond the power sector, NTPC and other players in the green hydrogen space are also putting in efforts to develop green hydrogen applications in the transportation and mobility space. NTPC Renewable Energy (NTPC REL), NTPC’s fully owned subsidiary, has issued a domestic tender to build India’s first green hydrogen fuelling station in Leh, Ladakh. NTPC REL is also building a separate 1.25 MW solar plant in Leh to make the hydrogen fuelling station completely green. The solar plant contract is expected to be awarded within a month. This development follows the recent release of a tender by NTPC REL and NTPC Vidyut Vyapar Nigam Limited for fuel cell buses in Ladakh. NTPC REL had previously signed an important MoU with the Union Territory of Ladakh for the development of green hydrogen technology in the high-altitude region. With this, Leh is soon to become India’s first city to implement a green hydrogen-based mobility project with zero emissions.
In addition to fuel cell based buses, other modes of fuel cell-based transportation are emerging in India. On the vehicle manufacturing side, Pune-based h2e Power Systems is developing India’s first fully integrated hydrogen fuel cell three-wheeler using proton exchange membrane fuel cells and innovative hydrogen cylinders in collaboration with Canada-based company Hydrogen in Motion under an Indo-Canadian programme funded by GITA, a public-private partnership between the Technology Development Board, Department of Science and Technology, Government of India, and CII.
Strategy for green hydrogen and outlook
The increasing emphasis on green hydrogen is expected to promote the manufacturing of local components for renewable energy plants and the hydrogen production infrastructure, especially electrolysers. This is in line with the government’s Aatmanirbhar Bharat vision. In addition to the focus on self-reliance under Aatmanirbhar Bharat, there is also a complementary agenda of international cooperation for hydrogen. In June 2021, India hosted a two-day summit on green hydrogen initiatives involving the BRICS countries. The event provided a platform to share the green hydrogen initiatives of different countries and views on how to take it to the next level. NTPC anchored the event. In his keynote address, the secretary, Ministry of Power, highlighted that the government and industry must work together to ensure that the existing regulations are not an unnecessary barrier to investment in green hydrogen. It was also emphasised that BRICS countries could work together to develop common international standards for hydrogen storage and transportation.
According to global consultancy firm KPMG, hydrogen demand in India is expected to grow at a CAGR of about 7 per cent to reach 12 million tonnes (mt) by 2030. The bulk of the current demand for hydrogen, which is nearly 99 per cent of the current total demand, is driven by refineries, and the ammonia (fertiliser) and petrochemical industries. According to TERI, the demand for hydrogen, with the majority stemming from industry sectors such as fertilisers and refineries, can increase to around 28 mt by 2050. There is also an upcoming latent demand in the mobility and power sectors expected to emerge by 2025. In line with this, initiatives for fuel cell-based mobility and pilot projects for applications in the power sector are already under way.
In sum, the green hydrogen sector is taking shape, with a strong expected demand from industry. It is also receiving policy support through the Hydrogen Mission and mandates. However, the road ahead is still rough and laden with difficulties, which can be addressed by a steady and secure investment flow, and a robust infrastructure.
By Meghaa Gangahar