A new dawn for the green hydrogen sector in India emerged when, on August 15, 2021, the Indian prime minister announced the launch of the National Hydrogen Mission, with a plan to turn India into a global hub for the production and export of green hydrogen. The hydrogen mission had previously been proposed by the finance minister in February 2021 during the Union Budget speech for 2021-22 with the aim to accelerate the generation of hydrogen from renewable energy. The Ministry of New and Renewable Energy 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 reportedly submitted in May 2021 for inter-ministerial consultations.
Hydrogen mandates
To create demand for green hydrogen, the government proposes to impose small mandates on industries that already use hydrogen for the consumption of a certain per cent of green hydrogen. These include fertiliser and petroleum refinery companies, which use almost all of the hydrogen derived from fossil fuels, contributing to almost the entire hydrogen consumption in India per year. Therefore, even a small mandate is expected to create a significant demand for green hydrogen. Further, in August 2021, the Ministry of Power issued the Draft Electricity (Promoting Renewable Energy through Green Energy Open Access) Rules, 2021.
Electrolyser manufacturing
The government is looking at the green hydrogen sector as an opportunity to build a fully integrated electrolyser manufacturing capacity in India. To this end, incentives are likely to be announced to promote large-scale electrolyser manufacturing. Production-linked incentives to support the manufacturing of electrolysers, such as programmes for batteries and solar photovoltaics, will also be planned, according to initial industry reports. The scheme will be designed in such a way that better performing electrolysers are incentivised. The government is also working with the Bureau of Indian Standards and the Department of Commerce on standards and regulations.
The government is looking at the green hydrogen sector as an opportunity to build a fully integrated electrolyser manufacturing capacity in India
The mission reportedly aims to support cutting-edge research and innovation to ensure the Indian green hydrogen industry remains globally competitive. Thus, the government will be supporting industry-oriented research and development (R&D). Public-private partnerships are being planned in this space. There are also proposals for setting up several centres of excellence in the country, focusing on R&D and knowledge resources.
Pilot projects and use in mobility
The government also plans to set up pilot projects to gain experience and enable demand. Moreover, there are plans for demand aggregation through centralised bidding of large-scale green hydrogen and possibly green ammonia projects. After this, long-term contracts of, say, 5-15 years are expected to be signed, so that producers are assured of a market.
Further, in the mobility sector, it is expected that the focus will be on long-range and heavy-duty vehicles. The capital expenditure for such projects is quite high right now, thus providing some form of viability gap funding is reportedly under discussion. The government is also looking at maritime applications. All in all, once hydrogen gains traction in the mobility sector, 100 per cent hydrogen pipelines, refuelling stations for mobility services and large-scale storage will be required.
Public sector initiatives
In October 2021, Gas Authority of India Limited (GAIL) announced plans to construct India’s largest green hydrogen-making facility, to bolster its natural gas operations with carbon-free fuel. The 10 MW plant will take 12-14 months to be established. The company has chosen two to three locations for the unit, one of which is in Vijaipur, Madhya Pradesh.
NTPC has started a pilot project for making methanol by integrating carbon captured from power plant flue gas and hydrogen produced from electrolysis. Under this initiative, it is also exploring the use of hydrogen-based fuel cells and electrolysers for the backup power requirement currently being met through diesel gensets. Further, NTPC Limited has floated a global expression of interest (EoI) notification to set up two pilot projects – a stand-alone fuel cell-based backup power system and a stand-alone fuel cell-based microgrid system with hydrogen production using electrolysers at NTPC’s premises. In August 2021, NTPC Limited also invited a global EoI to set up a pilot project for blending hydrogen with natural gas in the city gas distribution network in India. On successful implementation of the project, NTPC is expected to take it up at a commercial scale across India.
In July 2021, NTPC Renewable Energy (NTPC REL), NTPC’s fully owned subsidiary, 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. Further, NTPC REL and NTPC Vidyut Vyapar Nigam Limited have released a tender 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. Further, in July 2021, Indian Oil Corporation Limited announced its plan to build the country’s first green hydrogen plant at its Mathura refinery, given its proximity to the Taj Trapezium Zone. The company 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 in cooperation with Tata Motors.
Private sector initiatives
Recently, Reliance Industries announced plans to develop an electrolyser manufacturing and fuel cell gigafactory as part of the Dhirubhai Ambani Green Energy Giga Complex, under development in Jamnagar. The company is planning to generate 400,000 tonnes of hydrogen through the use of about 3 GW of solar energy at its proposed electrolyser gigafactory. By 2030, the company plans to create or enable enough capacity to generate at least 100 GW of renewable energy projects, which can be converted into green hydrogen. The company’s chairman also outlined a “1-1-1 Vision” to bring down the cost of hydrogen to under $1 per kg in one decade. Another major conglomerate, the Adani Group plans to triple its renewable power generation capacity, produce green hydrogen, power its data centres with renewable energy, and make its ports carbon-neutral by 2025.
In another big development, Indian independent power producer ACME signed an agreement to advance a 3.5 GW green hydrogen and green ammonia facility in Oman. The deal entails an investment of $3.5 billion in the special economic zone at the port of Duqm in central Oman. The electrolysers at the facility will be powered by 3 GW of solar energy and 0.5 GW of wind energy. The plant will be developed in phases, and the first phase is likely to be commissioned by the end of 2022. When operational, it will export green ammonia to demand hubs such as Europe and Asia. The construction of the facility is expected to begin after ACME’s first green hydrogen and green ammonia facility at Bikaner, India, is commissioned.
Extending the scope of FAME India Phase II scheme subsidies to promote fuel cells, hydrogen refuelling stations, etc., would be a key game changer for the hydrogen energy sector
In September 2021, a subsidiary of Norwegian energy company Greenstat, Greenstat Hydrogen India and Ayana Renewable Power signed an MoU to expedite the development of hydrogen technology in India. In August 2021, Ohmium International, a renewable energy start-up, announced the launch of its PEM electrolyser factory in Bengaluru. The plant will have an initial manufacturing capacity of 500 MW per year, with plans to scale up the capacity to 2,000 MW. Further, in July 2021, JSW Future Energy Limited entered into a framework agreement with Australia’s Fortescue Future Industries to explore the scope of green hydrogen projects in India across areas such as green steel making, hydrogen mobility and green ammonia. 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.
Strong international collaborations are needed to gain opportunities in the green hydrogen space
Future outlook
Going forward, extending the scope of FAME India Phase II scheme subsidies to promote fuel cells, hydrogen refuelling stations, etc., would be a key game changer for the hydrogen energy sector.
In addition, strong international collaborations are needed to gain opportunities in the green hydrogen space. All in all, the policy proposals and plans being discussed are positive, but the key driver for the mission’s success at the end of the day will be the budgetary provisions. As of now, the mission has received in-principle approval, but the budgetary proposals are still under discussion. At the earliest, it is expected that the Mission will be la-unched by mid-December 2021. While the past one year was about starting pilots, the next year will be about analysing the results of these pilots and taking the next steps in planning commercial-scale projects.
By Sarthak Takyar
