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India green hydrogen news

Courtesy : power-technology.com

India green hydrogen news

Hydrogen and ammonia are anticipated to be the future fuels, and production of these fuels using renewable energy is one of the major requirements towards sustainable energy security and reduction in fossil fuel import bills for the nation. Green hydrogen is generated by splitting water into hydrogen and oxygen in an electrolyser using renewable energy. The hydrogen produced can be combined with nitrogen to make ammonia, avoiding hydrocarbons in the production process. Green ammonia is used to store energy and in fertiliser manufacturing.

India’s Green Hydrogen Policy announcement comes promptly, as the country pledged to be carbon-neutral by 2070 at the COP-26 summit in Glasgow last year. The quest towards energy security gains more significance at a time when the ongoing Russia-Ukraine crisis has raised energy costs across the world, pinching India in particular, which imports 85% of its oil and 53% of natural gas requirements.

Policy Attributes

The policy offers a range of incentives to lure investors to bet on the development of green hydrogen and green ammonia:

Key Challenges  

India’s current hydrogen demand is around 6.7 million tonnes (MT) which is expected to approximately double by 2030. Oil refineries, fertiliser plants and steel units consume most of it as process fuel to produce finished products. Presently, it is grey hydrogen, which is produced from fossil fuels, such as natural gas or naphtha.

With the increased deployment of renewable power capacity, the price of renewable electricity has fallen sharply to make green hydrogen more feasible, but it is still expensive to compete with grey hydrogen. Incentives announced in the policy will help in lowering the cost of green hydrogen production, but it will remain the key challenge to make it as affordable as grey hydrogen which is four to six times cheaper currently.

The waiving of central open access charges will enable lower cost of production, however there are state level open access charges which can forfeit the intended incentives, therefore collaborative efforts are required to remove this disparity in charges and create beneficial impact of policy incentives.

Way Forward

Further to this first phase of policy announcement, the government plans to introduce Green Hydrogen Consumption Obligation in petroleum refining and fertiliser production on similar lines of renewable purchase obligation. It will mandate the use of green hydrogen and ammonia as a certain proportion of requirements in a phased manner. Initially, the refineries and fertiliser plants would be required to use 10% green hydrogen, which would be increased to 20%-25% in three to four years. The mandate will support the deployment of green hydrogen manufacturing until its cost comes down in parity with grey hydrogen.

The production cost can go down further if electrolysers are indigenously manufactured; India is targeting 15 gigawatts of electrolyser-making capacity and is considering production-linked incentives to boost local manufacturing.

Currently, alkaline water electrolysis technique is being used, which consumes more electricity to produce hydrogen, while use of polymer electrolyte membrane (PEM) electrolysis would bring down the electricity requirement resulting in further cost reduction for hydrogen production.

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