Green Hydrogen

Indian Government Is Supporting Green Hydrogen In Big Way

Green hydrogen is gaining popularity in India, with ambitious objectives set and several projects in the works. The government has even formed a specific National Green Hydrogen Mission to encourage green hydrogen adoption across India and establish an export center.

The National Green Hydrogen Mission has been granted a total budget of Rs 197,440 million to encourage large-scale uptake of green hydrogen in India. The mission aims to produce at least 5 million metric tonnes per annum (mmtpa) of green hydrogen annually by 2030, with the potential to achieve 10 mmtpa. This is a significant task, especially given that the country produces practically no green hydrogen and the market ecosystem is still in its nascent stages.

Global hydrogen demand by sector in the Net Zero Scenario, 2019-2030

The cost per unit of green hydrogen, which is rather expensive when compared to grey hydrogen, will be a crucial element in determining its future. The present worldwide green hydrogen production costs of $3-8/kg will reduce to $1.3-4.5/kg in 2030 and $1.0-3.0/kg by 2050, according to the International Energy Agency.

It is critical for green hydrogen to have inexpensive round-the-clock renewables to run green hydrogen electrolysers, and so a production-linked incentive system is being proposed to incentivize domestic manufacturing of electrolysers.

Because the green hydrogen industry is still in its early stages, most funding institutions are still analyzing and studying the possible hazards associated with green hydrogen projects. This will very certainly alter as the sector grows. In the early stages, most experts feel that green ammonia, a better established technology than green hydrogen, will pique the interest of investors.

The proposed PLI incentives, elimination of certain transmission tariffs, and renewable energy banking facilities are a positive move in this direction. Finally, long-term substantial offtake contracts and demand development are critical for mitigating financing risks and promoting the country’s green hydrogen industry.

Reference- Mercom India, Moneycontrol, RMI India, Economic Times, Business Insider