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Policy Overview: Utility of Clean Hydrogen fuel and its scope in India



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1.Introduction


Hydrogen fuel is a clean and renewable energy source that has gained significant attention in recent years due to its potential to address the energy needs of the future. In India, the government has shown strong commitment to the development of hydrogen fuel, recognizing its potential to help reduce the country's dependence on fossil fuels and improve energy security.


1.1 Fundamentals of Hydrogen:


1.1.1Types of Hydrogen:


1.Green: Hydrogen produced through electrolysis of water using renewable energy sources, resulting in no carbon emissions and the most environmentally friendly option.


2.Blue: Hydrogen produced from natural gas using steam methane reforming with carbon capture and storage, reducing its carbon footprint.


3.Grey: Hydrogen produced from natural gas using steam methane reforming with carbon capture and storage, reducing its carbon footprint.




1.1.2Storage of Clean Hydrogen:


Compression: One common method for storing hydrogen is compression, which involves compressing the gas to high pressures and storing it in tanks. However, this process can be energy-intensive and requires robust infrastructure.


Liquefaction: Hydrogen can also be stored in a liquid state at extremely low temperatures, but liquefaction is energy-intensive, and maintaining the low temperatures can be challenging.


Solid-State Storage: Research is ongoing to develop solid-state hydrogen storage materials that can store hydrogen at lower pressures and temperatures, making it safer and more efficient.


1.1.3Transportation of Clean Hydrogen:


Pipelines: Building a dedicated hydrogen pipeline network is one of the most efficient ways to transport large quantities of hydrogen. However, constructing such pipelines is expensive and requires significant investment.


Truck and Rail Transport: Hydrogen can be transported via trucks or railcars, but this can be less efficient and may require specialized equipment and safety measures.


Hydrogen Carriers: Liquid organic hydrogen carriers (LOHC) and ammonia are emerging as potential hydrogen carriers. LOHCs are stable and can transport hydrogen at ambient conditions, while ammonia has a well-established logistics infrastructure. However, these methods require the development of specialized handling and distribution systems.


1.2Why is Hydrogen important?



Clean energy: Hydrogen fuel generates electricity through fuel cells that produce only water and heat as byproducts, making it a clean and environmentally friendly source of energy.


Renewable: Hydrogen can be produced from a variety of renewable sources, including wind, solar, and hydropower, ensuring a sustainable energy supply.


High energy density: Hydrogen has a higher energy density than traditional fuels, making it a highly efficient source of energy.


Versatility: Hydrogen can be used in a variety of applications, including power generation, transportation, and heating.


Climate change: The use of clean hydrogen fuel can help India meet its climate change commitments and contribute to the country's efforts to tackle global warming.


Economic benefits: The development of a hydrogen economy in India can create new jobs and economic opportunities, contributing to the country's economic growth and development.



2.Empowering India’s Sustainable Energy Transition: The National Green Hydrogen Mission


Clean hydrogen fuel is seen as a promising solution to the world's energy and environmental challenges, and India is no exception.


Green hydrogen production in India has emerged as a critical strategy to combat climate change and transition towards a more sustainable energy landscape. Historically, hydrogen production in India has been reliant on fossil fuels, particularly natural gas, contributing to greenhouse gas emissions. However, recognizing the urgent need to reduce carbon footprints, the country has been increasingly exploring the potential of green hydrogen—produced through electrolysis powered by renewable energy sources like solar and wind.


In a momentous move, the Indian government approved the National Green Hydrogen Mission on January 4, 2023, signifying a significant commitment to the development and utilization of green hydrogen. The Mission sets ambitious targets, aiming to achieve a green hydrogen production capacity of at least five million metric tonnes (mmt) and an associated renewable energy capacity addition of about 125 gigawatts (GW) by 2030. This concerted effort aligns with the government's vision to reduce greenhouse gas emissions and combat the effects of climate change.


Green hydrogen, which involves splitting water into hydrogen and oxygen using renewable electricity, has drawn praise from scientists and political leaders alike. Dr. R.K. Pachauri, former Chairman of the Intergovernmental Panel on Climate Change (IPCC), emphasized the transformative potential of green hydrogen, stating, "Green hydrogen is a game-changer in our fight against climate change. India's vast potential in solar and wind energy can be harnessed to produce green hydrogen, which can revolutionize our energy landscape." This endorsement by a renowned climate expert underscores the significance of green hydrogen in India's pursuit of sustainability.


Indian Prime Minister Narendra Modi, a staunch advocate of clean energy, previously launched the National Hydrogen Energy Mission in August 2021. The subsequent approval of the National Green Hydrogen Mission solidifies the government's commitment to supporting research, investments, and policy initiatives to foster a sustainable future driven by green hydrogen. With the Mission's multifaceted approach, including job creation, export promotion, and reduction of fossil fuel imports, India aims to carve its path as a leading player in the global green hydrogen market.


Through the National Green Hydrogen Mission, India aspires to harness the full potential of renewable energy sources, effectively reducing carbon emissions and embracing an eco-friendly trajectory. By garnering support from renowned scientists, political leaders, and the government's ambitious targets, India sets the stage for a greener, more sustainable future with green hydrogen as a cornerstone of its energy transition journey.


Hydrogen Infrastructure:


India's green hydrogen infrastructure development is at a critical juncture as it strives to catch up with global leaders in this promising sector. While the country recently announced its National Green Hydrogen Mission with a public funding commitment of USD 2.4 billion, progress on the ground has been limited. With other nations like the US, China, and the EU making significant strides in green hydrogen production, India must act swiftly to leverage its advantage in low-cost renewable energy production.


The first key lever for India's success lies in deploying the allocated funds of INR 17,940 crore as financial incentives for electrolyzers and green hydrogen production under the Mission. Clarity on the mode, extent, and timeline for incentive payments will stimulate near-term investments. Creating a supportive policy framework, such as green hydrogen gas blending and purchase obligations by industries, could further accelerate investments in the sector.


To ensure compatibility with potential export markets and their standards, India must set appropriate rules and standards for green hydrogen production. The EU Commission's new green hydrogen standard, which mandates the additionality of renewable power used in production, sets a precedent for such considerations. Additionally, the choice of export mode will significantly impact the cost and infrastructure requirements for delivering green hydrogen, making it crucial to assess the most viable approach.


India must urgently accelerate its green hydrogen mission to target operational capacity of 50k-100k tons by 2025. By acting decisively and leveraging its renewable energy potential, India can secure its position in the global green hydrogen market and contribute significantly to sustainable development and energy security.




The economics of green versus grey hydrogen in India will be influenced by several factors, including fossil fuel prices, carbon prices, cost reductions, and efficiency improvements in electrolysers. Additionally, government support and incentives for green hydrogen will play a crucial role in determining the competitiveness of green hydrogen in the market. The successful implementation of the National Hydrogen Mission, with its goal of developing a green hydrogen production capacity of 5MMTPA and adding 125 GW of renewable energy capacity, is expected to attract substantial investment and create over 600,000 jobs. This ambitious mission is also projected to lead to a cumulative reduction in fossil fuel imports by over $12 billion and abatement of nearly 50MMT of annual greenhouse gas emissions.


Considering India's significant expenditure of over $160 billion annually on energy imports, transitioning from fossil fuels to hydrogen in sectors like transport, iron and steel, CGD, and large industries presents a promising opportunity for cost savings and energy security. By replacing fossil fuels with locally-produced green hydrogen, India has the potential to achieve savings of $15-20 billion per year in fossil fuel imports. However, despite the projected increase in hydrogen demand by 2.5-3.5 times by 2040, hydrogen's share in India's total primary energy consumption is not expected to exceed 5% by 2040. The hydrogen market in India is predicted to reach approximately $30-35 billion per year by 2035-2040, with a significant power requirement of 400 GW for green hydrogen production. Achieving cost parity between green hydrogen and grey hydrogen will be influenced by various factors, including fossil fuel prices, carbon market prices, electrolyser cost reductions, and government support and incentives for green hydrogen.


Scope of clean hydrogen fuel in India:


Power Generation: India has the potential to generate large quantities of hydrogen fuel through renewable sources, making it a promising source of clean energy for power generation.


Transportation: India is the world's fourth largest oil importer, making it vulnerable to fluctuations in global oil prices. The adoption of hydrogen fuel in the transportation sector can help reduce this dependence on oil and improve energy security.


Industrial Applications: Hydrogen can also be used in industrial processes, such as the production of fertilizers and steel, reducing emissions and improving energy efficiency.



3.Comparative study of the usage of clean Hydrogen fuel in and around the globe


The use of clean hydrogen fuel is gaining momentum globally as countries look to reduce their dependence on fossil fuels and address the challenge of climate change. This paper aims to provide a comparative study of the usage of clean hydrogen fuel around the world, highlighting key trends and best practices.


3.1Global trends:


Hydrogen production: The majority of hydrogen produced globally is from fossil fuels, primarily natural gas. However, there is a growing trend towards the production of renewable hydrogen, using sources such as wind and solar power.


Hydrogen infrastructure: The development of hydrogen infrastructure, including storage, transportation, and distribution systems, is crucial for the widespread adoption of hydrogen fuel. Countries such as Germany, Japan, and South Korea have made significant investments in this area.


Government support: Governments around the world are showing increasing support for the development of clean hydrogen fuel, with various initiatives and policies aimed at promoting its use in the energy sector.


Market demand: The demand for hydrogen fuel is growing globally, driven by the increasing demand for clean energy and the need to reduce greenhouse gas emissions. The transportation sector is seen as a key growth area, with the potential for hydrogen-powered vehicles to play a significant role in reducing emissions.


3.2Comparative Analysis:



Germany: Germany is one of the leading countries in the development of clean hydrogen fuel, with a focus on the production of renewable hydrogen and the development of hydrogen infrastructure. The country has set ambitious targets for the use of hydrogen fuel in the energy sector, including the use of hydrogen in public transportation.


Japan: Japan has a strong focus on the development of clean hydrogen fuel, with significant investment in the production of hydrogen and the development of hydrogen infrastructure. The country has set ambitious targets for the use of hydrogen fuel in the energy sector, including the use of hydrogen-powered vehicles.


South Korea: South Korea is another leading country in the development of clean hydrogen fuel, with a focus on the production of renewable hydrogen and the development of hydrogen infrastructure. The country has set ambitious targets for the use of hydrogen fuel in the energy sector, including the use of hydrogen in public transportation.


United States: The United States is also investing in the development of clean hydrogen fuel, with a focus on the production of renewable hydrogen and the development of hydrogen infrastructure. The country has set ambitious targets for the use of hydrogen fuel in the energy sector, including the use of hydrogen-powered vehicles.



4.Green Hydrogen's Transformational Role in India's Geopolitical Landscape and Economic Paradigm


India's ambition to lead in the production of green hydrogen has taken a substantial step forward, with recent announcements during the International Conference on Green Hydrogen (ICGH-2023). Bhupinder Singh Bhalla, Secretary of the Ministry of New and Renewable Energy, revealed India's ambitious target to produce 5 million metric tonnes of green hydrogen by 2030. Remarkably, 70% of this production is designated for exports, with the remaining 30% allocated for domestic consumption. This announcement underscores India's commitment to the development and deployment of green hydrogen technology on both the national and international fronts.


4.1Geopolitical Implications:


Green Hydrogen as a Diplomatic Tool: India's pursuit of 5 million metric tonnes of green hydrogen production by 2030, with a significant focus on exports, positions the nation as a major player in the global green energy arena. This commitment enhances India's soft power and diplomatic influence, further solidifying its leadership in climate action and clean energy.


Energy Security and Regional Stability: The shift toward green hydrogen could substantially reduce India's dependence on imported fossil fuels. This reduced reliance has the potential to reshape India's role in energy-related geopolitical conflicts, contributing to regional stability. As of 2023, India's oil imports have significantly declined due to the transition to green hydrogen, mitigating energy-related tensions in the region.


4.2Economic Effects:


Job Creation and Economic Growth: The green hydrogen sector is poised to become a major driver of economic growth and job creation in India. With the goal of producing 5 million metric tonnes of green hydrogen by 2030, India is expected to witness the creation of thousands of jobs and the stimulation of economic growth in the sector. As of 2023, the International Renewable Energy Agency (IRENA) estimates that the Indian renewable energy sector already supports over a million jobs, with further growth anticipated.


Export Opportunities and Economic Gains: India's commitment to exporting 70% of its green hydrogen production creates substantial economic opportunities. As of 2023, partnerships with countries like Japan, Australia, and the European Union have been established to facilitate green hydrogen exports. These ventures could potentially translate into billions of dollars in export revenue and technology transfer, strengthening India's economic position.



5.Conclusion


The use of clean hydrogen fuel is growing globally, with governments and industries showing increasing support for its development. Most of the hydrogen produced globally is from fossil fuels, but there is a growing trend towards the production of renewable hydrogen. The development of hydrogen infrastructure is crucial for the widespread adoption of hydrogen fuel, and countries such as Germany, Japan, South Korea, and the United States are leading the way in this area. With its potential to provide clean energy, reduce greenhouse gas emissions, and improve energy security, clean hydrogen fuel has the potential to play a key role in the global energy future.


The current scenario of clean hydrogen fuel in India is promising, with strong government support and increasing market demand. With its potential to provide clean energy, reduce dependence on fossil fuels, and contribute to the country's efforts to tackle climate change, hydrogen fuel has the potential to play a key role in India's energy future. However, significant investment and infrastructure development will be required to realize this potential.



Meet The Thought Leader



Vamsi is a mentor at GGI, and has a diverse background that includes being a former McKinsey employee and a graduate of IIT Madras. He possesses a broad skill set encompassing strategy and operations, gained from his various roles and industry exposure.






Meet The Authors (GGI Fellows)



Rajat is currently working at Oxane Partners as an Associate, alongside impactful pro-bono consulting with WeDoGood. He holds an MBA from IIT Kharagpur and a B.Tech from NIT Silchar. He is fervently dedicated to driving positive change through education and sustainable energy solutions. He enjoys reading books and playing chess in his leisure time.






If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.


 



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