India has the potential to shape the green hydrogen (GH2) ecosystem globally, experts feel.
At the panel discussion on green hydrogen during the recent IEEMA Annual Convention themed “Electricity to Energy: Vision 2047”, participants unanimously felt that India is taken GH2 very seriously and thanks to much groundwork already started, the country has the potential to shape the contours of the global GH2 landscape.
Hydrogen is not new to India but green hydrogen is. The good news is that India has shown serious intent in the GH2 space – the government has come out with supportive policies while the private sector has firmed up plans in setting up capabilities across the value chain.
Let us start with the basics. What is green hydrogen? Hydrogen can be produced by electrolysis of water; such hydrogen when produced using clean and renewable energy (for electrolysis) is called green hydrogen. It is therefore clear that when it comes to production of green hydrogen, there is no carbon-related emission involved. At this point, it is useful to know that there is also grey hydrogen and blue hydrogen. The most common — grey hydrogen — is produced by “steam reforming” of natural gas into hydrogen and carbon dioxide. Blue hydrogen is like grey hydrogen but with efforts made to capture the carbon dioxide emissions.
Under the National Hydrogen Mission, launched by the Prime Minister on August 15, 2021, India has targeted to produce 5 million tonnes of GH2 by 2030, and create the necessary required renewable energy capacity. Under this mission, green hydrogen as well as green ammonia are being viewed as the potential fuels to replace fossil-based fuels, principally coal. In summary, GH2 is poised to be an important vector in decarbonizing the economy across sectors like power, heat and transportation. The 5 million tonnes of GH2 envisaged by 2030 represents around 40 per cent of total hydrogen production in that year.
The biggest demand areas are therefore going to be industry (for heat and feedstock); power generation (co-firing of gas power plants with green ammonia) and transportation (mainly for heavy vehicles like multi-axle trucks, ships and aeroplanes). When the use of GH2 in industry picks up, there is ample scope for India to build group GH2 plants for use by industrial clusters, on the lines of group captive power plants (usually coal-based) currently in vogue.
On the supply side, which is generation of renewable energy, emphasis will be laid on solar and wind power. Further, because GH2 will need round the clock supply of green energy for electrolysis of water, renewable energy-based battery storage systems will play a critical role. Storage of GH2 itself will be of immense importance and this could be achieved by fuel cells, polymerized tanks, hydrogen caverns, etc.
In summary, the entire ecosystem of GH2 will create business opportunities for domestic companies, across the value chain – right from generation of green energy to storage of GH2. At this point, it is worth mentioning that India is believed to be the lowest-cost green energy producer in the world, especially with respect to solar power. This renders India as a potential low-cost GH2 producer as well.
Electrolyzers
The most important element in GH2 production is the electrolyzer. Roughly, 40 per cent of the total cost of setting up a GH2 plant is in the electrolyzer, while the remaining 60 per cent represents balance of plant (BoP). While India is still in its nascence with respect to electrolyzer technology, there is a production linked incentive (PLI) scheme that is expected to boost domestic capacity. If not the entire electrolyzer, Indian companies can do well to develop expertise in developing components for electrolyzers. However, there is tangible opportunity available to Indian electrical equipment companies in the BoP component. India can also meaningfully contribute to the safety and controls aspect of GH2 production. Meanwhile, it is estimated that the global capacity of hydrogen electrolyzers is just about 500 mw, which makes it a nascent sector even at the worldwide level.
Storage
Manufacturers and service providers in the electrical equipment space can also contribute towards storage of GH2. This can be, as discussed earlier, in the form of pressurized polymer tanks, caverns or conversion of GH2 into ammonia. India can help the GH2 ecosystem by developing technically superior alternatives for transporting the gas. Currently, H2 is converted into ammonia (NH3) for the purpose of transportation. It is then reconverted into H2 at the consumption point. However, there is a 30-40 per cent energy loss in this conversion-reconversion process due to which better alternatives need to be developed. It may be mentioned that H2 is a very light gas, thus making its transportation difficult and cost-ineffective.
Standards
A subtle but important dimension of the GH2 ecosystem is the need for industry standards across the value chain – generation, transportation and storage. Assuming that India deepens its engagement in the GH2 space over the years, it has the potential to develop and set standards that could graduate to gain international acceptance. Solar cells, as a comparable emerging area as far as India is concerned, does have standards defined by Bureau of Indian Standards (BIS).
Water
An estimated 50 billion tonnes of de-mineralized (DM) water will be needed to produce the targeted 5 million tonnes of GH2 by 2030. Though freshwater is currently used for the electrolysis process, desalinated seawater is an alternative. Given India’s projected requirement of DM water for GH2 production, desalinated water seems to be technically feasible option thereby creating business opportunity in the seawater desalination area.
Challenges & the way forward
GH2 could potentially set the foundation for energy independence for India. The country has enough renewable energy (RE) capacity required for GH2 production. It is estimated that around 15 GW of green energy capacity is required for production of 1 million tonnes of GH2. By 2030, India has targeted to produce 5 million tonnes of GH2 and has pledged RE capacity of 500 GW.
One important dimension in the GH2 landscape will be India’s indigenousness. Generally speaking, India has been able to adapt technology from the developed for its own use. In the case of GH2, India will have no such liberty. GH2 is new, even to the world. India will therefore need to do pioneering work.
It should be remembered that electrolyzer technology (the electrochemistry in H2 production) has not changed for 20-30 years. What has changed is the fact that the electricity used by the electrolyzer will come from green sources. Further, the scale of which electrolysis of water for production of H2 is taking place currently is very low. The challenge would be to ramp up capabilities of electrolysis and create a viable GH2 value chain at the commercial level.
Once the installed base of electrolyzer capacity in India rises, it will result in efficiency of scale, thereby bringing down the prices of GH2. Incidentally, price discovery of GH2 on a commercial scale has not yet taken place giving India the opportunity to set benchmark GH2 prices. The cost of grey hydrogen, for a frame of reference, is currently around $1.5 per kg.
In summary, India has a big opportunity on hand to develop a GH2 ecosystem and that too based on Indian suppliers. However, the country would need to focus on three important dimensions – quality, consistency and price. Only when a technically and commercially viable value chain is established, can India become globally competitive and a potential net exporter of GH2.
Also read: Hydrogen Energy Storage Is A Reliable Alternative To Batteries: Black & Veatch
Note: This story is based on views severally expressed at the panel discussion on green hydrogen held during the recent IEEMA Annual Convention themed “Electricity to Energy: Vision 2047” in Mumbai. The panel discussion was moderated by Mohammad Saif, Partner, Ernst & Young and saw the participation of Bimal Jindal, Head – Green Energy Development, Larsen & Toubro; Kapil Maheshwari, Leader, RE Development, Reliance Industries; Chandra Tiwari, Head – Hydrogen Business, Tata Power; Narendra Nath Veluri, CEO, ANERT; and Mr Srivatsa, Senior Partner, E&Y.
