India’s venture into the green hydrogen market holds significant promise, given its versatile applications ranging from agriculture, transportation and electricity to hard-to-abate sectors such as refinery, fertiliser, and iron and steel. According to MEC+, the total hydrogen consumption in India is 8.1 million tonnes per annum (mtpa). This includes domestic hydrogen consumption of 6 mtpa, hydrogen consumption in imported fertilisers at 1.2 mtpa, hydrogen consumption in imported ammonia at 0.5 mtpa and hydrogen consumption in imported methanol at 0.4 mtpa. According to a report by NITI Aayog, the demand for hydrogen in India is projected to quadruple to 29 million tonnes by 2050, with the steel industry and heavy-duty transportation accounting for 52 per cent. Of the total hydrogen demand, green hydrogen will account for 94 per cent by 2050.
In order to meet the country’s increased demand for green hydrogen and achieve energy independence by 2047, the government implemented several policies and programmes, such as the National Green Hydrogen Mission. The mission’s primary goal is to achieve a green hydrogen production capacity of at least 5 million metric tonnes per year, with domestic electrolyser manufacturing ranging from 60 GW to 100 GW by 2030. As per the International Energy Agency (IEA), this target is, notably, 7.5-12.5 times higher than the global electrolyser manufacturing capacity, which was around 8 GW in 2021. The government also implemented an incentive programme for the production of green hydrogen and electrolysers, waived interstate transmission fees for renewable energy used to produce green hydrogen and its by-products for units commissioned until December 31, 2030, and allowed open access to the grid along with the banking of renewable energy for 30 days to produce green hydrogen or green ammonia.
Several developments have taken place in this space in the past year to harness the country’s green hydrogen potential. Aligned with the government’s targets for the sector, both Indian public and private institutions, including renewable energy developers, electrolyser manufacturers, oil and gas entities, steel producers and various other stakeholders, have announced plans for significant investments across the green hydrogen value chain.
Renewable Watch presents a round-up of the key developments in this space over the past year…
Plans of private players
- Larsen & Toubro Limited, in collaboration with ReNew and Indian Oil Corporation Limited, has announced its plan to invest Rs 320 billion in green hydrogen projects with a key focus on electrolysers, green hydrogen plants and green ammonia projects. It also plans to invest around Rs 5 billion in electrolyser manufacturing. The company is in discussions with state governments to acquire more land for development near ports in order to transport green hydrogen and ammonia.
- Hydreen has raised a funding of $2 billion to build green ammonia and green hydrogen facilities in five Indian states. The company has received funding from European sovereign funds. Currently, construction work for two projects is under way in Kerela and Himachal Pradesh. Each project will have a capacity of 250 MW, and the ammonia produced from these plants is intended for international export.
- Amplus Solar has entered into an MoU with the Andhra Pradesh government to set up multiple decentralised green hydrogen production plants in the state. The company aims to set up 7.5 ktpa distributed green hydrogen plants for industrial consumption in Andhra Pradesh with an investment (including on-site hydrogen production plants and off-site wind and solar energy plants) of Rs 15 billion.
- Ocior Energy India has announced plans to establish a 1 mtpa green ammonia plant in Andhra Pradesh. The project will be executed with an investment of Rs 400 billion. The company has entered into an MoU with the Andhra Pradesh government for setting up the green hydrogen and ammonia project in the state. The renewable energy project will be operationalised in two phases by 2030.
- The ACME Group has signed a land agreement with Tata Steel Special Economic Zone Limited for developing a green hydrogen and green ammonia project on 343 acres of land. The project will be implemented at the Gopalpur Industrial Park in Ganjam district of Odisha. ACME intends to develop a 1.3 mtpa green ammonia plant. The green ammonia produced at this plant will be shipped from Gopalpur port facilities to markets in the west and east.
Plans of public entities
- REC Limited has signed an MoU with the Avaada Group, committing Rs 150 billion for the development of a green hydrogen and ammonia facility in Gopalpur.
- Indian Oil Corporation Limited is entering the green hydrogen production space with a 10 ktpa plant planned in Panipat. The company has invited global tenders to develop the facility on the land next to its Panipat refinery. It is planning to integrate this green hydrogen generation plant with the Panipat refinery’s existing hydrogen network. The plant will operate round the clock and produce around 1,250 kg of green hydrogen per hour.
- Hindustan Petroleum Corporation Limited is implementing a green hydrogen project at the Visakh refinery in Andhra Pradesh. The project will have an electrolyser capacity of 370 tonnes per annum. The company has already spent Rs 110 million out of a total allocation of Rs 330 million for the project.
- The Solar Energy Corporation of India has issued a tender for the selection of green hydrogen producers for setting up green hydrogen production facilities in India under the Strategic Interventions for Green Hydrogen Transition Scheme, Mode I Tranche I. The total capacity to be allocated under this tender is 450,000 mtpa, which is divided into two buckets: Bucket 1 – 410,000 mtpa under the technology-agnostic pathway, and Bucket 2 – 40,000 mtpa under the biomass-based pathway.
- NHPC has issued a tender to establish a pilot project for a green hydrogen-based mobility station in Kargil, Ladakh, to operate two hydrogen fuel cell-based buses in the area. The project entails the installation of two units with a capacity of 30 Nm3 hour. The expected daily hydrogen production target is 40 kg, with a minimum purity level of 99.97 per cent.
- NTPC Green Energy Limited (NGEL) has signed an MoU with Syama Prasad Mookerjee Port to set up a green hydrogen hub in Kolkata. NGEL and Nayara Energy have signed an MoU to explore prospects in the green hydrogen and clean energy space. The companies will work together to manufacture green hydrogen for captive use by Nayara Energy and expedite decarbonisation. In addition, NGEL has signed an MoU with HPCL Mittal Energy Limited to explore opportunities in the green hydrogen business and its derivatives like green ammonia and green methanol.
Outlook
The green hydrogen market in India is currently in its early stages of development, with significant potential for rapid growth. Green hydrogen adoption is projected to result in energy import savings ranging from $246 billion in 2030 to $358 billion in 2050. However, several challenges and issues must be addressed for India to establish itself as a leader in the green hydrogen sector.
As per an IEA report, the production of 1 kg of green hydrogen requires 9 litres of water. The report emphasises that in water-stressed regions, access to freshwater is a key concern during the production of green hydrogen. This may become a key issue for various large upcoming projects, especially in states like Rajasthan. Moreover, potential environmental issues may arise, impacting the implementation of projects. Another consideration is the propensity for hydrogen to easily leak, and the explosive reaction of liquid hydrogen with air, necessitating additional infrastructure to ensure safe handling and operations.
There are positive advancements in the segment as the Indian government and industry actively engage in collaborative initiatives with other countries. India is also planning to provide carbon credits for the production of green hydrogen as a means to attract investments from other countries. Furthermore, the government has identified 10 states that could play a pivotal role in the manufacturing of green hydrogen, considering factors such as the presence of industries suitable for use cases and the availability of ports and renewable energy resources. In addition, the Ministry of New and Renewable Energy has released a set of standards for green hydrogen, a preliminary plan for the research and development of the green hydrogen ecosystem in India, and has pledged investments amounting to Rs 4 billion.
Overall, the government has identified green hydrogen as a key driver for achieving its net-zero goals. It is providing various incentives to support the sector’s growth. Going forward, it is crucial to follow these policy interventions with on-the-ground implementation and streamlined regulations, to ensure the development of a sustainable green hydrogen ecosystem.
