Green Hydrogen Powered India: From Vision to Reality

Green Hydrogen Powered India: From Vision to Reality Green Hydrogen

Announcements of grand plans by Mukesh Ambani and Gautam Adani, and the partnership between L&T and ReNew have added serious ability behind the intent to produce green hydrogen in India 

The fact that India is not an energy self-reliant economy is well-known. Just a few weeks ahead of the Glasgow Summit, in August’21, Prime Minister Modi declared that India spends over Rs 12 lakh crore on importing energy. He said, “We need to become energy independent before 100 years of independence is completed.” And he added that this can be achieved through various schemes.

Thus, the Prime Minister launched the National Hydrogen Mission with an aim of harnessing green hydrogen power in achieving India’s decarbonizing goals. With the launch of the National Hydrogen Mission, PM Modi not only expressed the government’s intent to make India energy independent, but also announced ambitions of becoming a global hub for green hydrogen production and export. By attaching importance to green hydrogen’s role in decarbonizing, the message to the energy players was loud and clear: “Focus on Green Hydrogen”.

The move was welcomed by industry players in the energy sector, as they saw this as a visionary step in India’s transition to a low carbon economy.

Green Hydrogen’s Promise

All energy resources are known to produce hydrogen, but the use of hydrogen currently is limited in oil refining and chemical production, which mostly covers hydrogen from fossil fuels, with significant associated CO2 emissions. Hydrogen is divided as – ‘grey’ (produced from fossil fuels), ‘blue’ (produced from fossil fuels with carbon capture and storage) and ‘green’ (produced from renewable electricity).

There is little doubt that as we transition to a more energy efficient economy, hydrogen can play a key supplementary role to renewables and batteries.

According to estimates from Allied Market Research, the India hydrogen market was valued at $ 50 million in 2017, and is projected to reach $ 81 million by 2025, as it grows at a CAGR of 6.3% from 2018 to 2025. Post that is when a real surge could start, as technologies and costs start approaching within reach. On the basics of potential and role hydrogen can play, The Energy and Research Institute (TERI) concurs that the potential scale of hydrogen use in India is huge and is expected to increase between three and 10 times by 2050.

As per the Alternative Fuels Data Center, under US’s Energy Department, the energy in 2.2 pounds (1 kilogram) of hydrogen gas is about the same as the energy in 1 gallon (6.2 pounds, 2.8 kilograms) of gasoline. A 100% efficient electrolyser requires 39 kWh of electricity to produce 1 kg of hydrogen. The devices today require as much as 48 kWh/kg. So, if electricity costs are 0.05 US$/kWh, the power cost for the electrolysis process alone is 2.40 US$/kg of hydrogen. Not to mention the massive demand for renewable energy it will create.

India has, so far, had limited success in capturing the manufacturing benefits of certain clean energy technologies, such as solar PV and batteries. However, as the energy transition continues at an unprecedented pace and scale, requiring new low carbon technologies, TERI sees green hydrogen as the next ‘clean energy prize’, which will require coordinated action from industry and government of India to capture the benefits.

Technology innovation in electrolysers – to produce green hydrogen – and electricity generation from zero-carbon renewables is making the prospect of abundant low carbon hydrogen realistic.

The importance of hydrogen in the Net zero Emissions Scenario is further reflected in its increasing share in cumulative emission reductions. As per the International Energy Agency (IEA) report, strong hydrogen demand growth and the adoption of cleaner technologies for its production enable hydrogen and hydrogen-based fuels to avoid up to 60 Gt CO2 emissions in 2021-2050 in the net zero emissions scenario, representing 6% of total cumulative emissions reductions.

Add to this the increasing demand for hydrogen, which IEA says has grown more than threefold since 1975. Supplying hydrogen to industrial users is now a major business around the world. The demand further continues to surge – almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production. That also explain the sustained push from fossil fuel majors for Hydrogen including green hydrogen, as it enables them to use a large part of existing infrastructure.

The IEA report states that production of hydrogen is responsible for CO2 emissions of around 830 million tonnes of carbon dioxide per year, equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.

Looking Beyond The Hype

If we remove the hype around hydrogen, where do we stand? Things must be seen in perspective. The fact that hydrogen in the next one decade or so is competing with conventional fossil fuels and emerging low carbon alternatives, such as battery electric vehicles poses a huge challenge. And therefore, the launch of the National Hydrogen Mission comes at a right time as India requires enabling environment to take a quantum jump for achieving low carbon emissions.

Market players in India’s hydrogen market

In four months from the launch of the National Hydrogen Mission, three energy bigwigs – Reliance, Adani, and most recently ReNew (in partnership with Larsen and Toubro) have announced big plans for green hydrogen market.

Specifically, the entry of Reliance and Adani, two of India’s biggest industrial power houses in one of the newest and emerging sector of hydrogen is interesting not only because of the level of sync they are in, with the government announcement, but also because the traction which is sure to be there.

Reliance, which is a major player in the hydrocarbon, or fossil fuel segment has set itself to making green hydrogen available at $1 per kg by 2030. “I am sure that India can set even more aggressive target of achieving under $1 per kg with a decade. Although the costs of hydrogen from electrolysis today are high, they are expected to fall significantly in the coming years,” Ambani said in his speech at the International Climate Summit in November.

The current cost of green hydrogen produced by electrolysis is estimated at around Rs 350 per kg. India’s green hydrogen plan aims to bring it down to nearly half at around 160 per kg by 2029-30, which is close to $2 per kg announced by Reliance.

Reliance demands attention too, considering its sterling record in the telecom sector, where it has single handedly enable the creation of a thriving digital economy by crashing data rates. While it may not be fair to draw a comparison between energy and telecom sector, it won’t be unreasonable to state that Reliance can be a gamechanger in the whole clean hydrogen sector. Especially as Reliance also announced its plans to manufacture electrolysers.

Why Electrolysers Matter

The overall cost of the renewable energy and cost of electrolysers will play a key role in shaping the uptake of green hydrogen. While there has been a substantial decline in the cost of renewable energy over a decade, the cost for electrolysers is also projected to go down as the cumulative installed capacity of electrolysers increases.

According to KPMG, in the coming years, an exponential drop is expected in the cost of electrolysers, which are already at about $800 per kW, with some Chinese electrolysers costing as low as $400 per kW. Overall, green hydrogen costs are expected to reduce by nearly 50% by 2030. The differential between green hydrogen and grey hydrogen can be expected to be covered over the next 10 years.

The Adani group’s big investment plans of putting $ 20 billion in green hydrogen, which came sometime in October 2021, too reflects the entry of Green Hydrogen in the group’s strategic view.

Adani Green Energy, the group’s renewable energy company has shared plans of tripling its renewable power generation capacity over the next four years, having already achieved its initial target of 25 gigawatts four years ahead of schedule.

Gautam Adani, chairman and MD of Adani Group has said that the Group aims to be one of the largest green hydrogen producers in the world in this sector. This could give a push to help India emerge as the world’s cheapest hydrogen producer. The group’s overall organic and inorganic investments across the entire green energy value chain will range between $50 billion and $70 billion, he said

Larsen & Toubro (L&T) and ReNew Power agreement, the most recent announced as on Dec 2, 2021 too looks interesting because of the timing and investment outlook. It is looking to tap $2 billion green hydrogen business opportunities in two years in India and the neighbouring countries. Under this agreement, L&T and ReNew will jointly develop, own, execute and operate green hydrogen projects in India and adjoining nations. Renew’s obvious strengths in renewable energy development, coupled with L&T’s huge experience with large projects and building them means this partnership too is complimentary.

“The companies are already exploring opportunities in the Indian market for green hydrogen,” said Subramanian Sarma, Director and Senior Executive VP (Energy), Larsen & Toubro. Sumant Sinha, Chairman and MD of the NASDAQ listed ReNew said that several opportunities are coming up in green hydrogen and the partnership will not be constrained by capital availability.

It is anticipated that green hydrogen demand in India for applications such as oil, refineries, steel and fertiliser units and city gas grids will grow up to two million metric tonnes per annum by 2030 in line with the nation’s green hydrogen mission. This would call for investments upward of $60 billion, a joint statement of ReNew and L&T said.

Currently, grey hydrogen accounts for 95% of global hydrogen production. Though this type of hydrogen is not carbon – emission free experts feel that the switch to green hydrogen may not be easy, as it would take about a decade to bring the cost down. Producing green hydrogen costs about 3-5x of grey hydrogen.

The way forward

Marco Alvera, CEO of Snam Chemicals, had estimated in his book Generation H that the world will need to build 50 GW of electrolyser capacity (vs. 135 MW today) to help drive the prices of green hydrogen down to $2/kg, where it will become competitive with a range of fossil fuels.

A versatile renewable option, Hydrogen can be used in gas or liquid form, and can be converted into electricity or fuel based on various ways of producing it. Approximately 70 million metric tons of hydrogen are already produced globally every year for use in oil refining, ammonia production, steel manufacturing, chemical and fertilizer production, food processing, metallurgy, and more.

Countries across the globe are looking upto hydrogen as the next big thing. US’s Department of Energy is investing $100 million into the R&D of hydrogen and fuel cells, while the EU to meet the goals under Green Deal is investing $430 billion by 2030. Chile, Japan, Germany, Saudi Arabia, and Australia are among other countries that are investing heavily in green hydrogen.

Like all commercial products that go through various processes between production and its use Hydrogen too has to be packaged by compression or liquefaction, it has to be transported by surface vehicles or pipelines, it has to be stored and transferred. Experts raise concerns about issues of storage and transportation, liquefaction and regasification which are very expensive procedures. Appropriate handling of this very light and inflammable gas puts it in a high-risk category.

As of today, essentially all the hydrogen consumed in India comes from fossil fuels. However, by 2050, nearly 80% of India’s hydrogen is projected to be ‘green’ – produced by renewable electricity and electrolysis. Based on a comprehensive assessment of possible production routes conducted in reports, green hydrogen will become the most competitive route for hydrogen production by around 2030.

The pace of developments in hydrogen technologies is accelerating, driven by growing interest from governments and businesses around the world looking to drastically reduce emissions from their energy systems, whilst maximizing the use of domestic resources. Reports indicate that several leaders are emerging in this sector, including Japan, the European Union, and China. There is still a window of opportunity for India to capture large parts of this market, using the advantage of a large domestic market, competitiveness of green hydrogen, and low-cost labour.

TERI report says that policies should therefore be oriented to incentivize domestic manufacturing of electrolysers, in line with the Government of India’s ‘Make in India’ programme. The government must set targets for electrolyser deployment by 2030 and facilitate companies to establish electrolyser manufacturing facilities in India.

"Want to be featured here or have news to share? Write to info[at]