On the Front Foot: India’s green hydrogen policies and plans

India’s green hydrogen policies and plans

In the British era, Kolkata’s gas pipeline, which used to power street lights, had a mixture of hydrogen and carbon mono­xide. This practice was commonplace in other Indian cities too. Later, with the discovery of cheap oil, the way our econo­mies functioned changed dramatically. However, as it impacted the environment, there was a strong shift to move ba­ck to a hydrogen-based economy. Acc­o­r­ding to the International Energy Agency, about 40 per cent of the global carbon di-oxide em­issions come from power gene­ration. The remaining 60 per cent come from the use of fossil fuels in the industrial and mobility sectors. While the uptake of re­ne­wable energy has helped in reducing carbon em­issions from the power ge­ne­ration side across countries, the same success has not been there from the in­dustrial and mobility sectors. The hard-to-abate secto­rs remain a cause for concern. These are the energy-intensive industries th­at produce basic materials such as ste­el, petrochemicals, cement and fertilisers, which are needed by any country to grow. Green hydrogen provides a promising alternative to decarbonise these sectors.

In fact, 20 years back, the US announ­ced that it wished to have a global hydrogen economy. Several countries agreed and formed the International Partnership for Hy­drogen and Fuel Cells in the Eco­no­my. The partnership aimed to commercia­lise hydrogen technologies in a bid to displace fossil fuels.

The focus on green hydrogen has now gro­wn immensely for three key reasons. One, people have realised that countries are not in line with meeting the Paris Ag­ree­ment go­­als. Two, the falling cost of re­ne­wable po­­wer has made green hydrogen more lucrative. Over 50-60 units of ele­ctricity is required to produce 1 kg of hy­drogen th­ro­ugh electrolysis. If power cost reduces by Re 1 per unit, the cost of 1 kg of hydrogen will reduce by approximately Rs 50. Three, there have been improvements in electrolyser technologies with which the setting up of commercial projects has become feasible. Given these developments, before the end of the decade, green hydrogen will be viable in almost all sectors where grey hy­drogen is used today.

India’s plans

India produces over 5.5 million tonnes (mt) of hydrogen per year. However, all of it is being produced by natural gas, much of which is imported. Fossil fuel-derived products such as ammonia and urea are also impacting the country’s imports. Therefore, there are plans to produce gr­een ammonia and green urea domestically through green hydrogen.

India’s hydrogen mission aims to reduce import dependence. The prime minister has announced that India should become energy independent by 2047. Currently, our country fulfils almost 40 per cent of its total primary energy needs through im­ports. This amounts to close to $140 billion per year. To make energy indepen­de­n­­ce a reality, domestically produced gr­een hydrogen is crucial. The second di­men­sion is that India is a signatory to the Paris Agreement. Hence, to reduce air po­ll­u­tion in major cities and decarbonise eco­nomies, green hydrogen can play a key role. The third dimension of promoting green hydrogen is to achieve energy acc­ess across all households. The overall vi­sion is to make India a global hub for green hydrogen production and export.

For creating a demand for green hydrogen, the government proposes to put sm­all mandates on industries that already use hydrogen for the consumption of a certain per cent of green hydrogen. These will be fertiliser and petroleum refinery com­panies, which use over 99 per cent of the hydrogen derived from fossil fuels. Th­ese two industries together contribute over 5.5 mt of hydrogen per year. Even a small mandate will lead to a significant de­­mand for green hydrogen.

In addition, production-linked incentives for supporting manufacturing of electrolysers in the country, similar to programmes on batteries and solar photovoltaics, will be planned. The scheme will be designed in a way that better-performing electrolys­ers are incentivised. To meet domestic ­demand, the government does not see su­­­fficient supply coming from outside. This is an opportunity to build a fully integrated electrolyser manufacturing capacity in India. To this end, there will be incentives to promote large-scale electrolyser manufacturing. The draft mission also focuses on the development of a comprehensive framework of regulations and standards to ensure that performance and quality risks are covered.

The current regulations are not suitable for the use of hydrogen by untrained profess­ionals. To this end, the government is wor­king with the Bureau of Indian Stan­dards and the Department of Commer­ce. In addition, the government will set up pilot projects to gain experience and enable demand.  There are also plans for dema­nd aggregation through centralised bidding of large-scale green hydrogen and possibly green ammonia projects. Post this, long-term contracts of, say, 5-15 ye­a­rs will be signed so that producers are assured of a market. This will lead to a further fall in green hydrogen costs.

For pilot projects, the focus will be on em­erging electrolyser technologies, which may become mainstream in 5-10 years but are not competitive currently. The fo­cus will also be on hydrogen production from biomass. Its current cost projection is higher than hydrogen produced from el­ectrolysis. Still this route has the potential to contribute significantly going forward.

Application in the mobility sector

In the mobility sector, the focus will be on long-range and heavy duty vehicles. The capital expenditure for such projects is quite high right now, therefore providing some form of viability gap funding is un­der discussion. The government is also looking at maritime applications. Kerala’s Vizhinjam port hopes to provide refuelling facilities in the form of green hydrogen and green ammonia for ships. The Inter­na­tio­nal Maritime Organization also wan­ts to bring down its carbon emissions by twofold within the next 20 years. To this end, hydrogen and hydrogen-derived fuels will be key to achieving these goals. India could also become a global supplier of fuel for the maritime industry becau­se of its geographical location and the ability to produce cheap green hydrogen. To support this, infrastructure will need to be built for the delivery of green hydrogen. Once the capacity becomes large en­ough, 100 per cent hydrogen pipe­lines, re­fuelling stations for mobility services and lar­ge-scale storage will be required. In the initial stages, public funding will be required.

Focus on research and development

The mission aims to support cutting-edge research and innovation to ensure the In­dian green hydrogen industry remains globally competitive. To cover the risk, the government will be supporting industry-oriented research and development (R&D). In this space, public-private partnerships are be­ing planned. This will ensure that only commercially viable projects are se­lec­ted. Select projects will also be taken up for longer periods of, say, 10-15 years. This will include photoelectrochemical routes of hydrogen production. There are also proposals for setting up several centres of excellence in the country focusing on R&D and knowledge resources. Other strategi­es regarding human resources and public awareness are also being considered by the government.

Governance structure and future outlook

It has been planned that the mission will be governed by a high-level interministerial standing committee involving government players. There will also be an expert group, which will include technical professionals from the government, industry and academia. A secretariat is also being plan­­ned to look after the programme im­plementation.

The mission has an in-principle go-ahead but the budgetary proposals are still under discussion. At the earliest, it is expected that the mission will be finalised at the cabinet level within the next three months. The launch date of the hydrogen mission is ex­pected to be mid-December 2021.

The global demand for electrolysers is expected to be in the range of 60 GW-100 GW by 2030. The current global electroly­ser capacity is hardly 2 GW. Global electrolyser demand is expected to grow two-folds every year. India has a huge potential to meet this growing demand.

Based on remarks by Dipesh Pherwani, Scientist C, Ministry of New and Renewable Energy, at Renewable Watch’s second edition of the Green Hydrogen in India conference