Opinion India’s green hydrogen challenge

While the green hydrogen dream seems appealing, critical challenges must be examined to help design appropriate pathways to realise this vision. Hydrogen is produced through water electrolysis, something most of us would have learnt in our science textbooks in school. When the electricity used in the water electrolysis is produced from renewables, it is termed as green hydrogen.

Sustainability experts have ascribed an entire colour spectrum to hydrogen — green, blue, grey, black, and brown depending on their ability to totally avoid or capture the greenhouse gases produced in the process of making hydrogen. However, our focus is on green hydrogen as it has the potential to maximise decarbonisation of the energy sector and the use of energy in end-use sectors such as transport, buildings and industry. While the stated benefits of the National Mission are galore — savings to the tune of $12.5 billion from fuel imports, averting 50 MMTs of annual emissions of Carbon dioxide, fresh investments to the tune of $100 billion, and 6,00,000 green jobs, there are several challenges too. The challenges to produce and use green hydrogen can be classified into 4Es — electrolyser, energy source, end use and endogenous resources. We will delve into each one of them in this article.

Electrolyser challenge: According to IEA (International Energy Agency), as of 2021 the global manufacturing capacity of electrolysers stands at 8 GW/year. So, if India were to achieve its 2030 target, it would need anywhere from 60-100 GW of electrolyser capacity, which means almost 12 times the current global production capacity. India currently has launched projects to manufacture electrolysers, but the actual numbers as of today are negligible. Also access to critical minerals such as nickel, platinum group metals and rare earth metals such as lanthanum, yttrium and zirconium could hinder scaling up electrolyser manufacturing capability in India. These resources are concentrated in countries such as China, Democratic Republic of Congo (DRC), Australia, Indonesia, South Africa, Chile and Peru. India also has limited processing capabilities in these minerals. This challenge would entail India setting up largescale manufacturing, building expertise and securing geo-political partnerships for procurement of critical minerals, and improving overall technical and economic viability of electrolysers year-over-year while competing with other global players.

Energy source challenge: As per current estimates a completely efficient electrolysis system would require 39 kWh of electricity to produce 1 kg of hydrogen. This is, however, a laboratory tested figure and a typical operational figure is about 48 kWh per kg of hydrogen. Green hydrogen requires renewable energy as a source of electricity. India currently estimates a capacity of 125 GW of renewable energy to meet its green hydrogen 2030 targets, which would be in addition to the already proposed targets of 500 GW renewables energy capacity. So far India has only achieved 119 GW of the 175 GW targeted capacity using solar, wind, bio-power and small hydro. In addition to the generation capacity, the transmission capacity that includes a smooth facilitation of cross-border exchange of power between states is a critical requirement. Overall, this challenge would require India to add efficiently and economically close to 100 GW of overall renewable energy capacity per year over the next seven years and make available dispatch corridors and mechanisms.

End use challenge: Currently, most of the demand for hydrogen comes from the chemical industry to produce ammonia for fertilisers, followed by refining for hydrocracking and the desulphurisation of fuels. It can be a source of heat for industry, especially in hard to abate and electrify sectors such as steel, cement and aluminum production. In the transport sector, it can be used as fuel for heavy duty vehicles, aviation and shipping. The conversion efficiency from one form of energy carrier to another in the end use application will determine the scale of green hydrogen’s applicability.

For instance, where electricity can directly serve the purpose, having alternative energy carriers for the same use case would not make technical or economic sense. Hydrogen is a highly combustible and volatile element and its potency in other forms such as ammonia or methanol is only relatively reduced. If one were to look at green hydrogen being produced and stored in different forms for later use, it is critical to establish safety standards for storage and transportation, adding to the cost of hydrogen as a fuel.

Endogenous resources challenge: It has been estimated that the production of one kg of hydrogen by electrolysis requires around nine litres of water. Moreover, in the case of India, an independent assessment suggests a requirement of approximately 50 billion litres of demineralised water supply. As several parts of India are already severely water-stressed, solutions need to be found to cater to this additional water demand. While desalination has been suggested, this will not only increase the physical footprint of the required infrastructure, but also potentially add to competition for land use, impact biodiversity and create challenges and limitations in the location of electrolysers. This challenge would require the proposed green hydrogen hubs to strike a fine balance between being renewable energy rich, water resource rich and being close to hydrogen demand (end-use) centres for them to be economically feasible while keeping the additional costs minimum.

In 2020, the world produced around 90MMT of hydrogen. The International Renewable Energy Agency (IRENA) estimates that hydrogen and its derivatives will account for 12 per cent of global final energy consumption by 2050 (IEA estimate 530MMT), with two-thirds coming from green hydrogen. Currently, the global levelised cost of producing green hydrogen ranges between Rs 250-650/kg ($ 3-8/kg) while India aims to produce green hydrogen in the range of Rs 100-150/kg ($ 1-2/kg) by 2030. This would mean India will have to address all the challenges listed above as well as coordinate across multiple institutional bodies both public and private in record time. This is undoubtedly a steep uphill task but a moonshot worth undertaking for India!

The writers are from the Florence School of Regulation’s Global Unit, a centre of excellence for discussions and knowledge exchange on energy policy and regulation, based in New Delhi