Long Road Ahead: Insights from Renewable Watch’s Green Hydrogen Survey

Insights from Renewable Watch’s Green Hydrogen Survey

Amid the rising impetus being given to green hydrogen by the government of India, the Renewable Watch magazine conducted a pilot survey to better understand the present market sentiment towards green hydrogen, in terms of potential, deployment, manufacturing, research and development and its applications. The survey was conducted at a recent conference “Green Hydrogen in India” hosted by Renewable Watch.

Several insights have been gathered which highlight the opportunities, challenges and outlook of the sector, with a survey consisting of 31 respondents. The respondents include developers, manufacturers, researchers, government officials and likely industry consumers of green hydrogen.

We highlight some of the key findings from the survey:

  1. To begin with, the respondents were asked to rank five key challenges in the green hydrogen space in terms of severity. On an average, the cost of green hydrogen vis-à-vis the cost of grey hydrogen was ranked as the most severe challenge. This was followed by transport and storage in the second place, procurement of electrolysers in the third place, lack of clarity on policy incentives at fourth and uncertainty regarding technologies as the least severe challenge among the given options.
  2. Roughly 40 per cent of respondents believe that both, clean water and renewable electricity may be difficult to arrange for green hydrogen production, while 36 per cent believe that neither are difficult to arrange.
  3. Manufacturers were asked about the support that would be required from the government to make domestic electrolyser production feasible. The extension of the production-linked incentives scheme, tax exemptions and early bird tax holidays were the most popular responses. Furthermore, other responses suggested support mechanisms in the form of investments in research and development, subsidies for research, low-cost provision of finance, viability gap funding, priority sector lending, removal of import duties, demand side incentives such as hydrogen purchase obligations, minimum guaranteed off-take and streamlining regulatory mechanisms.
  4. For industrial consumers, the feasible percentage of green hydrogen purchase obligations ranged between 5 per cent to 95 per cent, with no clear preference shown to a particular range.
  5. In terms of risk perception of green hydrogen projects, most respondents (15 out of 31 respondents) perceived such projects to be under the high-risk category, followed by 14 respondents who perceived them to be moderately risky, while only two respondents considered green hydrogen projects to be low risk.

6. For manufacturers and developers looking to expand their green hydrogen businesses, 70 per cent declared their aim to keep their expansion plans limited to the domestic market while 30 per cent aim to produce for exports as well.

  1. The Indian government recently launched India’s first hydrogen fuel cell electric vehicle, the Mirai, in collaboration with Toyota. To understand the willingness of consumers to pay for green hydrogen vehicles, the survey presented 4 price ranges under which consumers would be willing to purchase a hydrogen fuel cell electric vehicle. As shown in the chart below, over 90 per cent of respondents would not spend more than 20 lakhs on green hydrogen vehicles. At present, the cost of these vehicles in anticipated to be much higher.

Green hydrogen will be a key driver of non-fossil fuel based energy transitions across the world. Since the application of the technology is still at the nascent stage, there are several aspects that need to be considered. Standards for safety, financial support for development and a robust policy framework would go a long way in ensuring that the country reaps the maximum benefit from the technology. India has already launched the first phase of its green hydrogen policy, however, the second phase is awaited for greater clarity on incentives. Given the rising prices of coal and gas, globally, the importance of green hydrogen has been highlighted now more than ever. Thus, with the right incentives, green hydrogen is expected to reach a feasible price point and be adopted at a commercial scale in the coming few years.

Access the Green Hydrogen Survey form here