The Rise of Green Hydrogen: Insights from India’s Ambitious $2.1 Billion Push

Plaksha University Partners With Tabreed For Cooling As Service InitiativeBillion Push. Photo by-Freepik

By- Shalin Sheth 

India is setting a global benchmark with its Green Hydrogen Mission, aiming to become a global hub for Green Hydrogen production and export. This ambitious initiative seeks to bolster energy independence and significantly decarbonize key economic sectors. The heart of this mission lies in achieving a Green Hydrogen production capacity of 5 million metric tonnes per annum (MMTPA) and enhancing renewable energy capacity by 125 gigawatts (GW) by 2030. This is expected to reduce greenhouse gas emissions by 50 MMTPA. A central component of this effort is the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, which features two financial incentive mechanisms focused on domestic manufacturing of electrolysers and Green Hydrogen production.

Policy Framework and Initiatives

The National Green Hydrogen Mission (NGHM) is primarily focused on positioning India as a leader in Green Hydrogen production, utilization, and export. A significant aim is to replace Grey Hydrogen, currently used in industries like petroleum refining and ammonia production, with Green Hydrogen. The mission’s budget of Rs 197.44 billion (US$2.41 billion) is allocated across various segments, with Rs 174.9 billion (US$2.13 billion) dedicated to the SIGHT program. Other allocations include Rs 14.66 billion (US$178.8 million) for pilot projects and Rs 4 billion (US$48.8 million) for R&D.

In the larger context of combating climate change and moving towards carbon neutrality, India’s move is both ambitious and timely. Let’s see the key Government Initiatives and how it aligns with global efforts to embrace cleaner, greener energy solutions.

Government Initiatives and Policy Framework

• Establishment of the National Green Hydrogen Mission: The Indian government has set out the National Green Hydrogen Mission with an initial allocation of Rs. 19,744 crore. This mission targets the development of a Green Hydrogen production capacity of at least 5 million metric tons per annum by 2030, in tandem with an increase in renewable energy capacity by about 125 GW​​.

• Financial Incentives and Support: A significant portion of the mission’s budget, Rs. 17,490 crore, is dedicated to the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT), offering financial incentives for domestic electrolyzer manufacturing and Green Hydrogen production. This approach is designed to boost the indigenous manufacturing sector, aiding in the development of an efficient Green Hydrogen ecosystem​​.

• Pilot Projects in Key Sectors: The government has earmarked Rs. 1,466 crore for pilot projects in sectors such as low-carbon steel, mobility, and shipping, which are crucial for testing and demonstrating the viability of Green Hydrogen technologies in real-world applications​.

• Development of Green Hydrogen Hubs: The Mission plans to identify and cultivate regions capable of large-scale Green Hydrogen production and utilization. These Green Hydrogen Hubs will receive dedicated infrastructure development support, with an allocation of Rs. 400 crore up to 2025-26 for the initial phase​​.

• Enabling Policy Framework and Infrastructure Development: The government aims to provide various policy provisions, including waivers of interstate transmission charges for renewable energy used in Green Hydrogen production, to expedite the growth of the sector. Additionally, there is a focus on building supply chains for efficient hydrogen transport and distribution​.

• Regulation and Standards Development: Efforts are underway to establish a robust framework of regulations and standards, crucial for the sector’s growth and international alignment. This framework will include guidelines for quality and performance criteria, essential for integrating Green Hydrogen into various economic sectors​​.

• Research, Development, and Skill Development: A public-private partnership framework, the Strategic Hydrogen Innovation Partnership (SHIP), will be facilitated to encourage research and development. This R&D focus is expected to be goal-oriented and time-bound, aiming to develop globally competitive technologies. Additionally, coordinated skill development programs will be initiated to create a skilled workforce in the Green Hydrogen domain​.

SECI’s RFS in SIGHT Program Attracts Major Interest

SECI’s Request for Selection (RFS) for electrolyser production has sparked significant attention, drawing bids that total a remarkable 3328.5MW from 21 contenders, notably exceeding the initial 1500MW target. These bids originated from various parts of India. The ultimate locations for these manufacturing units will largely depend on the incentives and subsidies offered by individual state governments. In essence, the firms shall opt for locations providing the most advantageous support and benefits for their business operations.

Issues and Challenges Faced by the Sector

Despite the prevailing enthusiasm, the integration of Green Hydrogen into domestic industries is hampered by significant challenges. These challenges primarily stem from infrastructure limitations, regulatory ambiguities, and the absence of clear mandates. Moreover, the sector is confronted with concerns regarding bankability and anchor demand. To ensure project viability and achieve sales targets, manufacturers are required to secure anchor customers. This condition is pivotal for accessing the full spectrum of incentives.

From a technological standpoint, there appears to be a discernible bias towards alkaline technology, predominantly due to its localization ease. This inclination could potentially result in overlooking opportunities to establish manufacturing bases for other competitive technologies.

India’s progression towards green hydrogen signifies a significant advancement for our energy sector. It transcends mere technological advancements; it is about fostering a cleaner environment and ensuring a sustainable future for all. We are all integral to this journey, and it is indeed captivating to envision its future trajectory.

Conclusion

India’s substantial investment of $2.1 billion in Green Hydrogen underscores a significant advancement towards energy transition and sustainability. While the ambition and progress achieved are commendable, the journey is replete with challenges, encompassing market readiness, infrastructure development, and technological adaptation.

To surmount these challenges, a concerted and collaborative effort is imperative among policymakers, industry stakeholders, and technology providers. As the global community increasingly gravitates towards greener energy solutions, India’s Green Hydrogen initiative emerges as a noteworthy endeavor, positioned to influence and shape the international Green Hydrogen landscape.

Shalin Sheth is the Founder & Managing Director of Advait Infratech Limited.