In a report titled ‘Harnessing Green Hydrogen – Opportunities for Deep Decarbonization in India’, NITI Aayog has said that given the benefits green hydrogen has for India, the nation should take real action to make full use of the potential.
The report, which was released by NITI Aayog and independent non-profit RMI, offers 10 noteworthy actions that can serve as a roadmap for a national action plan on green hydrogen. This includes:
• A comprehensive roadmap focusing on all aspects of green hydrogen.
• Intervention on the supply side to reduce the cost of green hydrogen to $1/kg.
• Establish mandates and provide incentives to achieve 160 GW of green hydrogen generation capacity.
• Build a total manufacturing capacity of 25GW by 2030, together with ancillary manufacturing and R&D investments.
• Launch a green hydrogen standard and a labeling program.
• Promote the export of green hydrogen and green hydrogen-embedded products through a global hydrogen alliance.
• Facilitate investment for green hydrogen through demand aggregation and dollar-based bidding.
• Encourage state-level action and policy-making related to green hydrogen.
• To encourage capacity building and skill development.
• Creation of an inter-ministerial governance structure.
NITI Aayog said India There is a need to build green hydrogen corridors and governments can consider funding companies and encourage entrepreneurs to spread the word about green hydrogen. Additionally, it was suggested that demand aggregation and dollar-based bidding are necessary for green hydrogen to encourage investment.
NITI Aayog said, “Based on the major challenge of the state, three hydrogen corridors will be developed across the country.”
The report also stated: “Government spending and public-owned entities are critical at every stage of technology innovation because of a longer-term investment outlook and greater tolerance for uncertainty. Governments provide grants and loans to start-ups and projects.” support entrepreneurs through incubators and investor networks, and create regulations that manage first-mover risks.”
It added: “They are an important source of concessional finance to bridge the markets and increase support. The government can also use public procurement and purchase incentives to crowdsource demand and private investment in specific markets.
However, the report noted that the development of the hydrogen economy has proved difficult due to high costs, a complex supply chain, laws and regulations.
Green hydrogen is far more expensive to produce than hydrogen made from fossil fuels. Green hydrogen will eventually become economically viable due to declining renewable energy costs and economies of scale, but there is more work to be done. When compared to oil and gas, the sourcing and supply chain of hydrogen is more sophisticated because they can be manufactured using different processes and are used in many industries.
Furthermore, the transport and storage of hydrogen remains a significant constraint that will require significant infrastructure improvements.
The report highlights that despite all the difficulties mentioned, hydrogen is proving to be increasingly more economically beneficial than alternatives for some use applications and, as a result, a market for hydrogen is slowly developing. Is.
Direct combustion, the production of electricity through fuel cells, or industrial operations that employ hydrogen as a chemical feedstock are all ways in which hydrogen can be used to generate energy.
Transport fuels for light-duty cars, buses, trucks, trains, and perhaps cargo and aircraft are examples of direct use in iron and steel plants and refineries, along with industrial processes, grid balancing, and co-firing in thermal power plants. . Hydrogen is an essential chemical feedstock for the production of ammonia (used in the fertilizer industry), methane and methanol.
Most developed countries, including India, have committed to net-zero targets.
One of the key requirements for emissions reduction, especially in areas challenging to reduce emissions, is to switch to green hydrogen and green ammonia.
According to the analysis, hydrogen demand in India could more than quadruple by 2050, accounting for up to 10% of the world’s total consumption. It also said that steel and heavy-duty transport are projected to be the main drivers of demand growth in the long term, accounting for over 52% of total demand by 2050.
Generating the hydrogen requirement in the near future is going to be driven by industrial decarbonization (both energy and feedstock). But as per the report, long-term potential exists in the areas of decarbonization of power, transport and even shipping and aviation sectors.
The report said: “Hydrogen could help reduce the country’s reliance on oil imports and strengthen the domestic job market. Additionally, it provides the potential to participate in the upcoming global energy transition and the economic opportunity presented by the transition.” does.”
It also noted that currently, national government subsidies for hydrogen projects, directly or indirectly, exceed $11.4 billion annually. This indicates a growing desire to support a hydrogen economy similar to that provided to the solar and wind industries in recent decades.
India could benefit from the change given the size, scope and economic competitiveness of the renewable energy sector highlighted in the report. It also states that green hydrogen, unlike fossil fuels, which have resource and geographic limitations, can be made anywhere with large amounts of renewable potential.
“India’s strong economy and manufacturing and industrialization ambitions provide other opportunities to participate in the emerging global hydrogen economy. A strong market for green hydrogen is fueled by growing demand for production and consumption technologies such as electrolysers and fuel cells, and scaled manufacturing. translates to opportunity,” the report said.
However, according to the report, an important aspect of this change is the financing of hydrogen production and use.
It said that for industry participants, risk mitigation measures are essential. To achieve this, subsidized finance, education and business, capacity building for public and private institutions, and shared learning on technical readiness and demonstration projects can be used. These steps can boost industry and lenders’ confidence and facilitate this transition with specific support for domestic pilot projects.
“India has a unique opportunity to become a global leader in the hydrogen energy ecosystem. With appropriate policy support, industry action, market creation and acceptance, and increasing investor interest, India continues to meet its goal of economic growth, job creation and recovery as a low-cost, zero-carbon manufacturing hub. can establish itself. Public health,” the report concluded.
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