India to produce 5 million tonnes of hydrogen by 2030
India plans to manufacture five million tonnes of green hydrogen to meet its climate targets and become a production and export hub for the fuel by 2030, according to the ministry of power. The nation is setting up separate manufacturing zones, waiving inter-state power transmission charges for 25 years and providing priority connectivity to electric grids to green hydrogen and ammonia producers to incentivise production. The five million tonnes of India’s production target is a half of the European Union’s 10 million tonnes of planned production of hydrogen from renewable energy by 2030. India, with a population more than three times that of the EU, has a much lower per capita energy consumption, but is one with the fastest growth rate of energy demand in the world.
However, like all nations, India also faces the challenge of producing green hydrogen at an affordable cost. Green hydrogen produced by renewables is far from competitive compared to other fuels, costing nearly double the price of hydrogen produced from coal, India’s main source of electricity generation. The good news is that the private sector has taken on the challenge. Indian companies have declared ambitious intentions to adopt hydrogen as a fuel as the country converts to carbon-free fuel, ranging from Mukesh Ambani’s and Gautam Adani’s businesses to state-owned oil refiner Indian Oil and power generator NTPC. These are some of the top companies that are going to invest in renewable energy and green hydrogen in 2022 or the near future.
Reliance Industries’ energy business is about to undergo a change that will make it a carbon-free conglomerate by 2035. It plans to replace sales of road fuels like diesel and gasoline with cleaner alternatives as it seeks to hit a net-zero target. According to a presentation made at a seminar the firm revealed its plan for achieving a US$1 per kg green hydrogen production. The conglomerate will repurpose a US$4-billion plant that currently converts petroleum coke into synthesis gas to produce blue hydrogen for US$1.2-$1.5 per kg. Blue hydrogen is made using fossil fuels but captures the carbon dioxide formed during its production, and Reliance sees the conversion as a temporary measure until the cost of green hydrogen, produced from the electrolysis of water using renewable energy, becomes competitive. Green hydrogen produced with renewable resources costs between US$3-6.55 per kg, according to the European Commission’s July 2020 hydrogen strategy report. Fossil-based hydrogen costs about US$1.80, and the commission estimated the cost of blue hydrogen at about US$2.40-3 per kg. In comparison, RIL thinks Syngas has potential to produce hydrogen at a competitive cost of $1.2-1.5 per kg.
“In the interim, till the cost of green hydrogen comes down, RIL can be the first mover to establish a hydrogen ecosystem, with minimal incremental investment, in India, says the company. Subsequently, as hydrogen from syngas is replaced by green hydrogen, the entire syngas will be converted to chemicals. Hydrogen production from gasification provides highly concentrated carbon di-oxide (CO2) stream which provides unique opportunity to capture 15 million tonnes per annum of CO2 at 30 percent of typical cost of carbon capture. This CO2 can be monetised by sale to urea producers and other users. The gasification unit is proposed to be transferred, as a going concern on slump sale basis, by way of the proposed scheme, it said adding the scheme of Arrangement has been presented to National Company Law Tribunal for approval.
RIL has also announced plans to invest US$75 billion over the next three to five years for transition from being the operator of the world’s largest oil refining complex to a leading producer of clean energy (with 100 GW by 2030). It entails three parts – a Rs 60,000-crore investment in four gig-factory that will manufacture and integrate all critical components for the business; a Rs 15,000-crore infusion in building the value-chain, partnership and future technologies, including upstream and downstream industries and management repurposing the company’s engineering, project management and construction capabilities toward clean energy. RIL has already started work to build four giga-factories -. an integrated solar photovoltaic module factory; an advanced energy storage, a battery storage, an electrolyser factory for green hydrogen and a fuel cell factory for converting hydrogen into power.
Hydrogen produced from renewable energy (green hydrogen) can go a long way in enhancing India’s decarbonisation efforts and energy security. India has committed to reduce carbon emissions as a signatory to the Paris Agreement on climate change. Hydrogen has the potential to reduce and replace the demand for fossil fuels in industries such as steel, refineries, and fertilisers and in the transport and power sectors. It can help in advancing India’s decarbonisation efforts. The demand for hydrogen is expected to increase five-fold by 2050. Hydrogen produced from renewable energy can go a long way towards catering to this demand and can help decarbonise industries and the transport and power sectors, thus enhancing the country’s energy security.
Green hydrogen is produced via the electrolysis of water. It is a zero-carbon energy-vector and chemical feedstock and can deepen renewable energy markets across industries, sectors, and geographies and can be used for both grid-scale supply and off-grid storage. Globally, green hydrogen production is at a nascent stage and accounts for only one per cent of the global demand for hydrogen. It is also the most expensive hydrogen production process and is at least two times more expensive than grey hydrogen – largely because of high cost of electrolyser, the main catalyst of hydrogenising process. But the paramount importance of hydrogen in achieving zero carbon emissions it a matter of vital necessity.
Adani Group has followed RIL. The logistics-to-energy conglomerate has said that it will invest US$70 billion over the next 10 years to produce green hydrogen at one of the lowest rates in the world. The company is already largest solar power developer. Now, the Adani Green Energy Ltd (AGEL), a group subsidiary, is targeting 45 GW of renewable energy capacity by 2030 and will invest US$20 billion to develop a 2 GW per year solar manufacturing capacity by 2022-23. The group’s another energy arm, Adani Transmission Ltd (ATL), India’s largest private sector power transmission and retail distribution company, is looking to increase the share of renewable power procurement from the current 3 per cent to 30 per cent by FY 2023 and to 70 per cent by FY 2030.
GAIL State-owned GAIL (India) also has ambitious plans concerning green hydrogen. The PSU plans to build India’s largest green hydrogen plant. The company is testing the mix percentage before it scales it up. The hydrogen that GAIL plans to produce can be sold to fertilizer units.
NTPC (National Thermal Power Corporation Limited) The state-owned company is diversifying its portfolio to include renewable energy, energy storage, energy distribution, and electric car charging. NTPC intends to commercialize the production of green hydrogen. As a result of the economies of scale, this is projected to decrease in the future. In addition, NTPC has promoted the use of green hydrogen-based solutions in industries such as transportation, energy, chemical, fertilizer, steel, and others.
Indian Oil Corp. Indian Oil Corp is one of the PSU that plans to tap into the green hydrogen opportunity. It also plans to come up with a stand-alone green hydrogen manufacturing unit in Kochi. Indian Oil has set a target of converting at least 10 percent of its hydrogen consumption at refineries to green hydrogen soon. India Oil Corp. is India’s one of the biggest oil and gas provider with a strong hold on the domestic market.
Larsen and Toubro (L&T) Engineering major, L&T, also plans to into the green hydrogen space. The company has announced that it will set up a green hydrogen plant at its Hazira complex. The company plans to spend between INR 10-50 Bn on its green initiatives, spread over several years.
