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Strategic Intervention for Green Hydrogen Transition (SIGHT) – IMPRI Impact and Policy Research Institute

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Strategic Intervention for Green Hydrogen Transition (SIGHT) - IMPRI Impact and Policy Research Institute

Bhanvi

ABSTRACT

The government of India on August 15, 2021, announced the implementation of a project that encourages the use of green hydrogen. The objective of the project is to reduce dependence on fossil fuels and focuses on de-carbonization. For this, a project has been launched with an estimated budget of around ₹19,744 crores that will create a boom in the production of green hydrogen. With the implementation of this project, the country is expected to witness a surge of investments worth Eight lakh crores rupees with the creation of Six lakh jobs and a cumulative reduction in fossil fuels imports worth Rs One lakh crore.

Green Hydrogen is also acting as an attractive sector of investment for various giant companies as it is ensuring a promising future. Due to the multiple benefits, it offers there has been a surge in the demand for green hydrogen in the global market on the other hand India is witnessing the challenge of obsolete technology as advanced technology is extremely expensive and India needs to procure that from the advanced countries then only we can emerge as a leading global producer of green hydrogen and will be able to meet the market demand. In other words, there is an exceptional need to move towards greener energy to achieve self-sufficiency and be an inspiration for the global Clean Energy Transition.

INTRODUCTION

The world is moving towards green energy fuels to ensure de-carbonization and to replace fossil fuels to establish a new energy paradigm. The introduction of various renewable and pollution-free energy sources such as solar, hydel, and wind has paved the way for the establishment of alternative energy sources. Yet these resources can’t be used for energy production for heavy industries such as vehicles and machinery, however, hydrogen proves to be exceptional and provides the best utilization to meet high energy demands.

The move towards Green Hydrogen will also ensure a considerable contribution towards Aatmanirbhar Bharat through self-sufficiency in energy needs. This mission also aims at making India the global hub for the production of green hydrogen and achieving net zero carbon emissions by the year 2070.

Green Hydrogen which is produced by breaking down water in an electrolyzer using only renewable energy, is expected to play an important role in oil refineries, steel mills, and fertilizer plants and can be used as an alternative to coal in steel mills and fossil fuels in long-haul transport like shipping and trucking. In order to promote renewable energy, the government has introduced “The Energy Conservation Bill” which ensures efficient utilization of ‘energy’ resources. During the COP-26 summit in 2021, India made the following commitments which may be relevant for energy efficiency efforts:

  •  reducing total projected carbon emissions by one billion tonnes by 2030, and 
  • reducing the carbon intensity of the economy by 45% by 2030 over 2005 levels

The bill focuses on achieving these objectives of COP26 by facilitating and making it mandatory to utilize non-fossil sources and carbon credit trading to ensure faster decarbonization of the Indian economy. The bill further ensures a framework for regulating energy consumption and promoting energy efficiency and energy conservation by setting up the standard for vehicles and vessels in terms of their consumption, generation, transmission, and supply of energy, and failure to result in a penalty of ten lakh rupees.

Source: World Bank ESMAPComponents

Classification and Production of Hydrogen

Source-Energy Education 

  • Black / Brown / Grey hydrogen -is produced using fossil fuels such as natural gas or coal. The two main methods used for production are steam methane reforming and coal gasification. These methods tend to use mostly carbon-intensive processes.
  • Blue Hydrogen-it is produced via natural gas or coal gasification combined with carbon capture storage (CCS) or carbon capture use (CCU) technologies to reduce carbon emissions.
  • Green Hydrogen– is produced using the electrolysis of water with electricity generated by renewable energy. The carbon intensity ultimately depends on the carbon neutrality of the source of electricity (i.e., the more renewable energy there is in the electricity fuel mix, the “greener” it will be.

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Source- WRI India

Which businesses will benefit?

Reliance Industries, Indian Oil, NTPC, Adani Enterprises, JSW energy, and ACME Solar have huge plans for Green Hydrogen.

“We aim to progressively commence transition from Grey Hydrogen to Green Hydrogen by 2025,” Reliance Industries Chairman Mukesh Ambani said.

For this, the company has partnered with Stiesdal, a climate technology company, to speed up cost reduction and commercialization of their Pressurised Alkaline Electrolyser technology.

French giant TotalEnergies SE and Indian billionaire Gautam Adani had planned to conglomerate and had invested $5 billion to produce green hydrogen and related products in India.

Adani New Industries will initiate by investing around $5 billion to build 2 gigawatts of hydrogen-producing electrolyzers powered by a 4-gigawatt solar and wind farm to make urea to displace imports of the fertilizer and plans to target 1 million tons of green hydrogen production a year by 2030, underpinned by 30 gigawatts of clean power capacity.

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Source-JMK Research

Project Outlay

The Union Cabinet sanctioned the National Green Hydrogen Mission on Jan 4, 2023, whereas The National Hydrogen Mission was launched on August 15, 2021, to cut down carbon emissions and increase the use of renewable sources of energy. 

The project outlay is ₹19,744 crore, out of which the government has allocated ₹17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, ₹1,466 crores for the upcoming pilot projects, ₹400 crores for R&D, and ₹388 crores towards other mission components.

The schemes and guidelines for this mission will be formulated by The Ministry of New and Renewable Energy (MNRE). The mission aims to ensure the attainment of the development of a green hydrogen production capacity of at least 5 MMT (Million Metric Tonnes) per annum with an associated renewable energy capacity addition of about 125 GW in the country by 2030.

At the World Economic Forum in Davos, Switzerland, in May 2022, Minister of Petroleum and Natural Gas Hardeep Singh Puri said “India will emerge as the leader of the green hydrogen by taking advantage of the current energy crisis across the globe.”

To work toward attaining goals by 2030 Oil India Limited has already commissioned India’s first 99.99% pure green hydrogen plant in eastern Assam’s Jorhat.

Advantages

  • Green Hydrogen will help achieve sustainability and the target of net zero carbon emissions as it is a cleaner fuel and doesn’t realize carbon on combustion. It also ensures cost effectiveness as by 2030 India can save one trillion rupees which would otherwise be spent on imports of fossil fuels.
  • Worldwide Hydrogen has a very promising future as the demand for hydrogen is gaining momentum as most countries are setting up strategies or policies for attaining a hydrogen economy and providing funds for R&D and implementation purposes.
  • Green hydrogen is an attractive offer for large companies to invest in as the government is encouraging by providing subsidies for hydrogen projects directly or indirectly.

Disadvantages

  • Green Hydrogen is less advantageous as compared to energy produced for electric vehicles as energy transmission is around 80% whereas green hydrogen is costly both in terms of cost and energy as it costs rupees 320 per Kg and produces around 33.6 kWh of energy from 1 Kg.
  • There is both storage and transportation problem with hydrogen as hydrogen being a gas has a very low density and requires to be stored in tanks with compression of around 350-700 bar.
  • It is very difficult to handle as it needs special pipelines and transporting liquid hydrogen requires a temperature of -253 degrees Centigrade, with heavy energy expenditure to transform it and then keep it in the liquid form. 

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SourceMint

The Rise in Demand for Green Hydrogen

  • According to The Energy and Resources Institute (TERI), a Delhi-based think tank, demand for hydrogen, which is currently around 6 million tonnes per year in India originating from the fertilizer and refinery industries, could increase to more than fivefold by 2050.
  • Moreover, the crisis in Ukraine has sped up the process of the generation of green hydrogen as after that there has been a rise in global investment in green hydrogen by $2 trillion a year by 2030.
  • Furthermore, RMI’s analysis of IEA’s outlook shows that the green hydrogen market could be US$120–US$175 billion annually by 2050 based on a range of projected prices.

Challenges

There are some key challenges in implementing green hydrogen projects in India. They are as follows-

  • There is a challenge to export of green hydrogen as unlike other fuels like petroleum, diesel, etc. green hydrogen can be produced onshore if resources like land, electricity, etc. are available in adequate quantity, So India needs to compete with countries like Australia and Middle-East that have the blooming infrastructure for producing green hydrogen.
  • Investors are reluctant to invest in green hydrogen project as it is capital intensive and there is a lack of cheaper alternatives. Moreover, there is instability in policies formed by the government as they have not taken a concrete shape till now.
  • There is a major challenge of commercialization as it requires legal and administrative adherence, certifications, recommendations, and regulations for different components of the nation.
  • Moreover, there is less social awareness regarding the same and it may take a significant amount of time to establish its considerable market share.
  • There is less demand for green hydrogen as currently, its use is being projected only in heavy industries such as transport, fertilizers, etc but it has worldwide use it can be used in power generation, alternative for various non-renewable fossils such as coal, natural gas, etc so proper investment needs to be laid for developing infrastructure and making it customer friendly.
  • A major challenge related to green hydrogen is storage as it requires low temperatures and high pressure and if not taken care then it may be disastrous and can catch fire as it is inflammable.
  • Moreover, it is an expensive alternative as the production of hydrogen mainly depends on electricity prices and environmental constraints that prove to be high-cost raw materials.

Way Forward

  • Green hydrogen can be utilized in the production of green ammonia as it is a unique feature that addresses the twin targets of fertilizers and energy security. so it has multiple uses as green ammonia can then be used in refineries, agriculture, and in manufacturing fertilizers.
  • The government is taking several steps to ensure the smooth implementation of schemes for better export opportunities the port authorities have decided to provide lands at applicable charges, to the green hydrogen producers to construct bunkers for storage.
  • The Ministry of New and Renewable Energy is also deciding to open a single-window portal for undertaking approvals related to manufacturing, transportation, storage, and distribution in the green hydrogen sector.
  • Though the government has provided funding of about 25 crores to MNRE it still needs to play a proactive role be it in terms of providing subsidies, encouraging R&D, and focusing on developing efficient technology set up as the mission green hydrogen is still in a nascent stage.
  • To achieve equilibrium in demand and supply for green hydrogen, potential industrial sectors, as well as groups, need to be identified or various initiatives like initialing providing a discount of 5 % on utilizing 20 Kg of hydrogen will boost demand for the product and subsidies could be provided to manufacturers so that they can balance out supply for the same.

References

(2023, January 13)| https://mnre.gov.in/hydrogen_energy_government_of_india |MNRE – Hydrogen_Energy_Government_of_India.

(2022, May 23) | India to be the leader of the green hydrogen: Puri in Davos |The Hindu

(2022, August 29)|Reliance AGM: Mukesh Ambani reveals plan to shift to green hydrogen |Hindustan Times.

(2022, June 14) | Adani, Total team up in $5bn green hydrogen project | Business and Economy News | Al Jazeera

India’s Green Hydrogen ambition – Challenges and way forward, Energy News|ET EnergyWorld

(2020, December 18)| Prospects and Challenges of Green Hydrogen Economy via Multi-Sector Global Symbiosis in Qatar

Green Hydrogen: Challenges for Commercialization |IEEE Smart Grid

(2023, January 4) /India OKs $2 bln incentive plan for green hydrogen industry | Reuters

https://pib.gov.in/Pressreleaseshare.aspx?PRID=1888547| PIB India

explained: What are green hydrogen and India’s national mission to cut emissions

Harnessing GREEN HYDROGEN |Times Of India

 Bhanvi is a Research Intern at IMPRI. She is pursuing her Bachelor’s from Shri Ram College of Commerce, Delhi University.

Read more by the author: New India’s Economic Transformation and Union Budget 2023-24.

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