Green hydrogen is the future of energy. It has the potential to radically reduce imports and catalyse India’s transition to climate-action leadership.
NEW DELHI : In what may further help burnish India’s green energy credentials, the government may extend the production linked incentive (PLI) scheme for manufacturing electrolyzers, which are used for producing green hydrogen.
Green hydrogen gas is produced by splitting water into hydrogen and oxygen using an electrolyzer, which may be powered by electricity generated from renewable energy sources such as wind and solar. The biggest impediment for a push towards green hydrogen is the cost of electrolyzer, with its present prices being over $800 per kilowatt.
A drop in electrolyzer prices is expected to make green hydrogen competitive vis-а-vis fossil fuels by 2030.
“India has this opportunity to be a global champion in green hydrogen. If we are able to do this, we can export green hydrogen to Japan, to Korea and Australia. That also gives us the opportunity to manufacture electrolyzers. That is a $20 billion global market. If you have to push for electrolyzers, you will have to push for production linked incentives,” Kant added.
PLI schemes, originally announced last year, seek to create global manufacturing champions in India by removing sectoral disabilities and creating economies of scale to develop complete component ecosystems in India. Prime Minister Narendra Modi in February invited global firms to take advantage of the Rs1.97 trillion PLI schemes for 13 sectors and expand their manufacturing in India.
https://www.livemint.com/news/india/pli-scheme-may-extend-to-electrolyzers-for-producing-green-hydrogen-11619686576509.html
Energy is a master resource which has the ability to catapult or cripple a growing economy. The rising threat of climate change has transitioned from climate-science conferences to billions being spent on disaster relief expenses. Global markets are increasingly demanding carbon-free products. Realizing the impending threat to their economies, several countries have announced net-zero targets. The top two energy consumers and emitters, the US and China, recently released a joint statement on climate change.
Electricity dominates the public discourse on the energy economy. However, it accounts for only 18% of India’s total energy demand. The rest 82% comprises other energy sources such as coal, oil and gas, and biomass. Unfortunately, our energy sector is heavily import-dependent (85% for crude oil, 53% for gas and 24% for coal). The volatility in the prices of these fuels has a huge impact on the import bill, to the tune of $160 billion. These numbers will double over the next decade as demand grows.
So what should India do to build a global-scale green hydrogen industry? First, it should announce ambitious targets for green hydrogen and electrolyzer capacity by 2030 on similar lines as renewables. Second, mandate blending a certain percentage of green hydrogen with grey hydrogen for existing applications like oil refining and fertilizers, depending on the viability gap, and mandate new greenfield capacities of hydrogen applications like oil refining and fertilizers to use only green hydrogen from a future cut-off date (to avoid long term lock-ins). Third, India should aim to build a vibrant hydrogen products export industry, such as green steel, using a phased manufacturing programme. Fourth, India should form a regional alliance with South Korea, Japan and Singapore to export green hydrogen from coastal India to help them reach their net-zero ambitions. Fifth, capital cost contributes around 30% of green hydrogen costs, and dollar-linked contracts for procurement of hydrogen should be explored in relevant demand sectors, as is done for oil and gas. Last, India should plan to roll out a production-linked incentive scheme for electrolyzer manufacturing to address the huge global supply bottleneck.
https://www.livemint.com/opinion/columns/green-hydrogen-can-spearhead-india-s-transition-to-clean-energy-11619381539046.html
