Fueling the Future: How Green Hydrogen and EVs are Transforming the Energy Landscape
- March 16, 2024
This article is the second of a three-part series of thought leadership on Energy Transition, authored by Anil Rawal. The Energy Transition series expounds on the role of six pillars on which global “Net Zero” ambitions would rest – Renewables, Battery Storage, Green Hydrogen, E-mobility, Distributed Energy Resources and Digitalization. In this piece, Anil Rawal dwells upon Green Hydrogen and E-mobility.
The global energy system is presently undergoing a momentous transformation. Over the past decade, investments in various renewable energy sources have surpassed those in fossil fuels. In 2022, global investments in energy transition exceeded $1 trillion, marking a remarkable 31 per cent increase from the previous year. Despite this impressive progress, the current level of global investment in low-carbon technologies falls short of the pace required to achieve Net Zero emissions by 2050.
The Net Zero ambition necessitates an annual investment of $5.7 trillion until 2030. The World Energy Transitions Outlook 2023 proposes redirecting $1 trillion of the planned yearly investments in fossil fuels towards energy transition technologies. Total cumulative energy investments should reach $44 trillion by 2030, with a strong emphasis on enhancing energy efficiency, promoting electrification, and expanding the grid.
Accelerating the deployment of renewable energy sources such as solar and wind is imperative to significantly reduce carbon emissions. Renewable energy maintained its leading position in terms of investment in 2022. However, more must be done to achieve the 1.5°C climate goal. Globally, we need to add 1,000 GW of renewable power every year to triple the total renewable energy capacity by 2030. Achieving this would allow us to avoid 7 billion tonnes of CO2 emissions by 2030. Simultaneously, there is a pressing need to intensify the use of renewable energy in various end-use industries. Additionally, concerted efforts are necessary to replace coal power and gradually phase out fossil fuels.
In the course of this ongoing energy transition, a multitude of frontiers are emerging, propelling the transition from fossil fuels to more sustainable energy sources. Ranging from solar and wind power to green hydrogen, battery storage and EVs, these emerging frontiers are significantly reshaping how we generate, distribute, and consume energy.
Green Hydrogen: Fuel for a Sustainable Energy Future
In an era marked by unprecedented energy demands, intensified by current global geopolitical events, the narrative of energy security has become central to existence of nations. Energy, arguably, forms the pivot of all political, environmental, economic, and social considerations worldwide. As the world navigates these challenges, exploring alternatives that ensure cost-effective energy delivery without compromising transition goals has become paramount. Green hydrogen, as a zero-emission energy source, emerges as an effective alternative in facilitating the global shift towards a Net Zero emissions future.
Forecasts predict a significant increase in the share of electricity in final energy consumption, rising from 18 per cent in 2020 to nearly 50 per cent by 2070, with the majority sourced from renewable energy. Additionally, 25-30% of energy demand is projected to be met through green hydrogen (GH2) using renewable electricity.
Countries with a low cost of renewables, like India, possess a distinct advantage, potentially becoming leading producers of green hydrogen with far-reaching geopolitical and economic impacts. India, recognizing the transformative potential of green hydrogen, launched the National Green Hydrogen Mission in early 2023. With an ambitious target of generating 5 million metric tonnes annually by 2030, the initiative aims to curtail nearly 50 million tonnes of CO2 emissions and save over $12 billion in fossil fuel imports.
Beyond emissions reduction, the transition to green hydrogen, fosters the growth of a domestic energy sources, reducing reliance on imported fossil fuels and enhancing energy security. Green hydrogen has the potential to create new global energy centres, challenging the dominance of global oil-producing nations over energy security. It could also reverse wealth flows from energy-dependent nations, like India, to countries that have prospered based on natural resources such as oil. The anticipated growth in cross-border hydrogen trade, especially in sectors like cement, refineries, and chemicals, aligns with evolving environmental legislation, such as the CABM by the UK and IRA by the USA.
Early deployment of hydrogen technologies in developing countries could enhance energy security and prevent a widening global decarbonization divide. A diversified hydrogen market would mitigate supply chain risks, improving energy security globally. Access to technology, training, capacity building, and affordable finance will be pivotal in unlocking hydrogen’s full potential to decarbonize the global energy system, contributing to stability and equity worldwide. Green hydrogen, therefore, stands as an imperative disruptor in the evolving landscape of global energy security and transition.
Navigating Towards a Net Zero Future by Accelerating the Electric Revolution
The transportation sector contributes about 15 per cent to the global energy related carbon emissions. Electric vehicles (EVs) are poised to steer the globe towards a Net Zero future. Recent years have been witnessing remarkable growth in EV sales, marked by expanded range, improved performance and life cycle price parity being achieved in various geographies and various segments of vehicles.
In 2022, electric vehicle sales experienced an unprecedented surge, surpassing a significant milestone of 10 million units sold—outpacing the total number of cars sold across the entire European Union. Globally, the share of EV sales more than tripled in just three years, reaching an impressive 14 per cent in 2022, up from approximately 4 per cent in 2020. If the momentum of the past two years persists, we can align carbon dioxide emissions from cars with the Net Zero Emissions by 2050 (NZE) Scenario by 2030. Achieving Net Zero requires an annual growth rate of approximately 25 per cent in electric car sales between 2023 and 2030. To accomplish this, rapid expansion of charging infrastructure and scaling up battery manufacturing capacity are imperative.
In India, electric vehicles are poised to account for more than 40 per cent of India’s automotive market, generating over $100 billion in revenue by 2030, propelled by robust adoption in various categories. The electric vehicle industry in India is gaining momentum, with 100 per cent FDI possibilities, new manufacturing hubs, and an increased focus on improving charging infrastructure. According to an independent study by Council on Energy, Environment & Water (CEEW), the EV market in India represents a US$206 billion opportunity by 2030 if the nation maintains steady progress toward its ambitious 2030 targets. This would necessitate a cumulative investment of over $180 billion in vehicle production and charging infrastructure.
To provide sustainable progression to the EV market, enhancing grid resilience and grid flexibility is essential. This requires robust demand-side management through grassroots digitalization initiatives. Developing comprehensive strategies for expanding and enhancing the network planning down the distribution transformer and incorporating digital technologies for seamless two-way communication between electric vehicles and grids, is essential. These measures ensure that EVs effectively contribute to grid stability, rather than pose a potential challenge.
Anil Rawal is Managing Director & Chief Executive Officer, IntelliSmart Infrastructure Pvt Ltd.
(The third and concluding part of the “Energy Transition” series will appear on www.tndindia.com soon. Click here for the first part of this article )
