Making green hydrogen viable demands financial, tech support to lower costs

Synopsis: Bringing down the cost of producing Green Hydrogen in India will require a mix of financial and technological interventions.

Background

• Read here: Green Hydrogen – Explained, pointwise

What is the major issue with Green Hydrogen adoption?

Cost: According to The Energy and Resources Institute (TERI), the cost of green hydrogen production is $5-6 a kg, approximately thrice the cost of predominant technology that uses fossil fuels and is called “grey hydrogen”.

Note: According to a compilation by the Scientific Information Re­so­urce Division at the Bhabha Atomic Re­search Centre, most of the world’s hydrogen production is grey.

What is the present global scenario wrt Hydrogen production?

Scale: According to the International Renew­a­ble Energy Agency’s World Energy Transi­tions Outlook report, less than 1% of annual global hydrogen production is green

Efforts: Investments are under way to ramp up green hydrogen manufacturing. In December 2020, seven companies — ACWA Power, CWP Re­n­ewables, Envision, Iber­drola, Ørsted, Snam and Yara — announ­ced a global coalition to acce­lerate the production of green hydrogen 50-fold in the next six years.

These companies have targeted the deployment of 25 GW thro­u­gh 2026 of renewab­les-based hydrogen production.

At what price point will adoption of Green Hydrogen be feasible for industry?

An analysis by the Hyd­rogen Council, a Belgium-headquartered initiative to promote hydrogen adopt­ion, found that it will be feasible for steel and fertiliser production, power generation and long-range shipping to adopt green hydrogen if it is available at $2 per kg price.

What steps is India taking to push for Green Hydrogen?

India is taking its first few steps.

IndianOil recently anno­unced that it is setting up the country’s first green hydrogen plant at its Mathura refinery.

IndianOil’s R&D centre has been working since the early 2000s to explore the use of hydrogen as a fuel by mixing it with compressed natural gas (CNG) to make H-CNG.

In November 2020, govt announced the launch of the National Hydrogen Energy Mission.

In terms of government support for green hydrogen, a cabinet note proposing to make it mandatory for fertiliser plants and oil refineries is in the works.

The govt also aims to extend the production-linked incentive (PLI) scheme for manufacturing electrolysers to produce green hydrogen.

What are future projections for India wrt Green Hydrogen?

According to industry body India Hyd­rogen Alliance (IH2A), the annual demand for hydrogen in the country is around six million tonnes (MT), mostly from fertiliser plants and refineries.

It needs to go up to 28 MT by 2050 and 40 MT by 2060 if the net-zero carbon target is to be achieved. However, by 2050, nearly 80 per cent of India’s hydrogen is projected to be green — produced by renewable electricity and electrolysis.

What steps India must take?

Reducing expenditure on Electrolysers: Indigenous development of critical materials and local innovation for components can help reduce electrolyser capital expenditure to below $300 per kilowatt.

Attractive financial incentives like the PLI scheme for electrolysers.

National H2-themed Energy Transition Fund: India should create a national H2-themed Energy Transition Fund, with co-funding partnerships with sovereign partners, multi-lateral agencies, clean energy funds and industry, with the aim to raise $1 billion by 2030 for deployment towards national hydrogen projects of a certain scale.

Source: This post is based on the article “Making green hydrogen viable demands financial, tech support to lower costs” published in Business Standard on 10^th Sep 2021.

Terms to know

• Hydrogen Council