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How India can position itself as a low-cost, zero-carbon green hydrogen manufacturing hub by Amitabh Kant

 ​​Hydrogen, as an energy carrier, is key for achieving decarbonisation of hard-to-abate sectors. Many sectors such as iron ore and steel, fertilisers, refining, methanol and maritime shipping emit major amounts of CO2, and carbon-free hydrogen wil...

While rapid electrification of the economy is going to be an important step towards decarbonising energy systems and enhancing efficiency levels, electricity cannot address certain carbon-intensive sectors which have to be decarbonised to ensure net-zero emissions.

Hydrogen, as an energy carrier, is crucial for achieving decarbonisation of hard-to-abate sectors. Many sectors such as iron ore and steel, fertilisers, refining, methanol and maritime shipping emit major amounts of CO2, and carbon-free hydrogen will play a critical role in enabling deep decarbonisation.

India is one of the early movers in the green hydrogen space. There are multiple reasons why India is pursuing this with vigour and conviction.

Firstly, neither hydrogen nor electrolyser is a new technology. More than 70 million tons of hydrogen is produced annually across the world, with India clocking around 8% of global production.

Secondly, India’s distinct advantage in low-cost renewable-energy generation and world-class clean-power execution capabilities makes green hydrogen the most competitive form of hydrogen in the medium run. This enables India to be potentially one of the most competitive producers of green hydrogen in the world. Since 75% of the cost of green hydrogen is dependent on renewable energy, we should target to further bring down the cost of solar power to Rs 1 per Kw/h through lower cost of financing.


Energy security is the third important reason to pursue green hydrogen as it will enable the emergence of a domestically produced energy carrier that can reduce the dependence on fossil fuel imports of $160 bn per year. In addition, with 500 GW renewables expected to come on line by 2030, green hydrogen could act as a solution to extract value out of excess renewable power and avoid the duck curve possibilities in the grid. Key policy measures for creating a green hydrogen ecosystem have recently been announced.

Following are the three steps that will make India a leader in green hydrogen. Firstly, India should make urgent efforts to secure the time-limited export markets. The EU is quadrupling its green hydrogen import plans for 2030. There is huge potential for exports to EU, Japan and South Korea. Secondly, India should encourage industrial R&D in electrolysers and other green hydrogen components. Indian companies cannot be dependent on foreign technology suppliers.

We need to industrialise next-generation hydrogen technologies in India.

Thirdly, industrial applications such as refining and non-urea fertilisers have to be mandated to go 100% green hydrogen by 2030 to ensure economies of scale for this nascent industry to flourish. With these measures, the price of green hydrogen should fall from $4 per kg to $1 per kg by 2030. With proper policy support, industry action, market generation and increased investor interest, India can position itself as a low-cost, zero-carbon green hydrogen manufacturing hub of the world.

When a diesel locomotive engine of the Indian Railways — identification number 40608 — was dispatched from its factory in Varanasi on June 6, 2019, it was not business as usual. As the engine chugged along, it was scripting history. It was the last fossil fuel-powered engine to be manufactured before the railways phased out diesel locomotives, a calibrated move to bring down the use of diesel in running trains in India.

Today, the national transporter consumes about 2 billion litres of diesel annually (2021-22). But if GoI has its way, by 2030, it will be run entirely on electric power, that too, renewable energy. The railways’ target is to build an installed capacity of 30 gigawatts (GW) of renewable energy in the next eight years, reducing the yearly consumption of diesel to 0.2 billion litres, just enough for its reserve fleet of about 1,000 diesel locos that might be needed in emergency, e.g., natural disasters and wars. According to the railways’ internal estimate, seen by ET, it will save 1.8 billion litres of diesel by 2029-30, which translates into a savings of Rs 16,250 crore ((base year: 2021-22)).

The railways’ renewable target, in fact, is only about 6% of India’s ambitious goal of generating 500 GW (1 GW=1,000 MW) of alternative energy by 2030, up from 102 GW at present (153 GW, if hydel power is factored in). What’s more, projects of 72 GW capacity are under implementation, while another set of projects to produce 21 GW are in the bidding stage, according to information provided by Union Minister for Power and New and Renewable Energy RK Singh in a written reply in the Rajya Sabha last month

While India has already pencilled in the script for going green, the long war in Ukraine and its disastrous fallout on crude oil prices could only accelerate the process. Though global oil prices have eased a bit in the last few days (it skyrocketed to $140 a barrel last month), Indian crude oil basket price at $113 in March as against $85 in January is still too big, leading the government to back oil marketing companies’ hiking of retail prices almost on a daily basis.

GoI seems to be circumspect about what lies ahead. Even as New Delhi is celebrating $418 bn worth merchandise export in 2021-22, the highest ever for the nation, its trade deficit has also soared at a phenomenal pace, reaching $192 billion, a jump of 87% y-o-y, driven mainly by a surge in global prices of petroleum products. The Ukraine war as well as sanctions against oil and gas major Russia would mean an oil-consuming nation like India would continue to bear the brunt in the current fiscal year as well.

While investments in EVs are pouring in, GoI is turning the spotlight on a newer and better option — green hydrogen.

Future security

Power is required to generate hydrogen. When it is generated by renewable energy, it is termed green hydrogen. If conventional energy is deployed to make hydrogen, it is grey hydrogen, which leaves a bigger carbon footprint. Now, grey hydrogen is used for industrial purposes.

“For India, shifting to green energy is important not only to address climate change but also for its own energy security,” says Prof Ashutosh Sharma, former secretary in the department of science and technology, while explaining GoI’s current position of pushing electric vehicles (EVs) as well as embracing a newer solution in green hydrogen. “India has been experimenting with EVs but that is not sustainable in the long run. Use of batteries is not a green option. EV is, at best, a transitory phase.

Ultimately, we have to move towards green hydrogen vehicles. We have to produce hydrogen by using renewable energy only,” he adds.

Amitabh Kant, CEO of the government think tank NITI Aayog and a votary of EVs, says India’s roadmap must include a green hydrogen option.

“India’s distinct advantage in low-cost renewable energy generation and worldclass clean power execution capabilities makes green hydrogen the most competitive form of hydrogen in the medium run,” he says, adding that India is one of the early movers in the green hydrogen space.

Meanwhile, car companies of late have lined up to announce their mega investment plans for EV, which has seen a major policy push since 2019. “The industry is committed to EVs.

We are making significant investm e n t s in this direction,” says V e n u Srinivasan, chairman of  T V S M o t o r s, which has announced an investment plan of Rs 1,200 crore in future technologies as well as EVs over the next four years. Mahindra Group has also committed to invest over Rs 3,000 crore in the EV space. Its new range of EVs is set to be unveiled in July.

India’s largest car maker, Maruti Suzuki, too, has joined the EV bandwagon, albeit belatedly. Last month, the company announced it would be investing Rs 10,000 crore for making electric vehicles in India, apart from creating dedicated verticals for the purpose. RC Bhargava, chairman, says that the upfront cost of an EV is still a hindrance for car companies to shift their gears from making conventional cars to electric ones. While an entrylevel petrol car is priced at Rs 4 lakh, a lower-end EV starts at Rs 15 lakh. A comparative price for a green hydrogen car in India is not available as its commercial production has yet to kick-start. Last month, Union Road Transport and Highways Minister Nitin Gadkari hogged the limelight when he arrived at Parliament in a Toyota Mirai, India’s first green hydrogen fuel cell-powered car. “Green vehicles do not mean EVs alone. There are transitional technologies such as CNG, bio-CNG, hybrid etc., that can help car companies go green faster,” says Bhargava.

While the sale of 11,623 units of electric passenger vehicles in India in calendar year 2021 is considered a landmark, the real shift of gears is taking place in the market of electric two-wheelers and three-wheelers. Both the categories have significantly enlarged their footprints in the last one year. Sales of e-two wheelers, for instance, shot up by 419% y-o-y to 1.36 lakh units. The data for the first quarter (JanuaryMarch 2022) shows the industry has already clocked sales of 2.6 lakh e-two wheelers and 7,001 passenger vehicles, according to retail sales figures collated by Jato Dynamics.

Vineet Mittal, chairperson of Avaada Energy, one of India’s leading green and renewable energy companies, argues that the rising fuel costs triggered by international geopolitics and its resultant crude oil price rise could lead to more investments in newer technology such as green hydrogen. Jami Hossain, vice-president, technical chair of World Wind Energy Association (WWEA), seconds such a scenario. “Hydrogen as a gas can be stored and transported in a cylinder. This is a real game changer,” says Hossain.

“Given India’s vast renewable resources, it can definitely take the lead in the generation of green hydrogen, which will not only reduce our oil requirements but also that of LNG and go a long way in helping address the energy needs of India, apart from providing a huge export opportunity,” says Sumant Sinha, chairman and CEO of ReNew Power, which has recently inked a binding term sheet for a joint venture with Larsen & Toubro and government-run Indian Oil Corporation for supplying green hydrogen to industries.

On the policy front, the Union ministry of power in February notified a green hydrogen/green ammonia policy to promote renewable energy generation— a major step in reducing the dependence on fossil fuels in India.

This new power policy, the Ukraine war and the rising oil prices as well as Gadkari’s display of the hydrogen car in Parliament have all coalesced into one scenario: GoI is serious about going green, ready to embrace newer technologies. The problem is how to minimise the duration of this unsettle transitory phase. Otherwise, both the government and India Inc may end up frittering away time and resources while chasing wrong technologies in transition.






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