A Giant Leap

National Hydrogen Mission heralds important developments in the sector

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

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