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 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