Energy independence through hydrogen

of India Green Hydrogen Policy Issued on February 17, 2022, has addressed several key challenges such as open access, waiver of inter-state transmission charges, banking, time-bound approvals, etc., and is expected to give a further boost to India’s energy transition.

India’s per capita energy consumption is about one-third of the global average and one-twelfth that of the US. This coupled with price volatility, as seen during the Russia-Ukraine crisis and the roller-coaster ride of energy prices from historic lows in 2020 to record highs in 2021, poses a serious threat to our energy security. which can raise an obvious need. To strive for energy independence. Hydrogen, a new age fuel, is touted as India’s gateway to energy independence. Hydrogen has a multifaceted role in the energy landscape of the future, whether it is energy storage, long-distance transportation, or the decarbonization of the industrial sector.

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In the long run, the two major major fuels are hydrogen and electricity. Although both are energy carriers, hydrogen can be stored on larger scales and for longer periods, clearly confirming its enormous potential to be a great balance for the growing supply of convertible renewable energy. It will complement and accelerate renewable energy in India’s clean energy transition, supporting India’s ambitious plan to achieve 500 GW of renewable capacity by 2030.

Hydrogen: a game changer

Hydrogen plays a major role in the decarbonization of India’s transport sector. The advantages of fuel cell vehicles over battery electric vehicles are faster refueling and longer driving range making them ideal for long distance transportation which is a major constraint with Li-ion batteries. In the industrial segment, hydrogen can de-carbonize ‘hard-to-abate’ areas such as iron and steel, aluminum, copper, etc. It has a great potential to produce fuels such as methanol, synthetic kerosene and green ammonia.

India’s hydrogen consumption stood at around 7 million tonnes in 2020 and is projected to jump to around 28 million tonnes in 2050, according to The Energy and Resources Institute (TERI). Assuming 25% export capacity, we can expect a requirement of 35 million by 2050. Based on this assumption, we can calculate that India will need a tentative capacity in the range of 192 GW to 224 GW of electrolyzers by 2050, assuming that it is all green hydrogen. The global capacity of electrolysers has just crossed 300 MW in 2021. This indicates that India will need electrolyser capacity of 640 to 750 times the current global capacity by 2050.

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This would lead to a rapid increase in electricity demand to around 1,500 to 1,800 TWh, meaning only for hydrogen production; India will need 110-130% of its current total electricity generation (2020-21) by 2050. Therefore, a road map should be drawn up for the rapid growth in power demand, especially from renewable energy.

In addition to the ever-increasing demand for electricity, the high cost of hydrogen manufacturing and water scarcity could also pose a challenge. About nine liters of water are required to produce 1 kg of hydrogen by electrolysis. Therefore, hydrogen project planning should be holistic and targeted in areas that are not water scarce.

Creating a hydrogen economy is a chicken-and-egg problem because consumers want low costs that may be possible with scalability and large investments, but producers want assured demand for them. Hydrogen meets the three Es of India’s energy road map – energy security, energy sustainability and energy access – and should India strive to seize the A&E, viz. So that the industry can be encouraged to its full potential.

five step strategy

On the demand side, a five-step strategy should be devised. Firstly, a mandate should be given to the sophisticated industries such as refining and fertilisers, with adequate incentives, to generate initial demand. Second, industries manufacturing low-emission hydrogen-based products need to be encouraged by government policies to, inter alia, promote green steel and green cement. Third, blending hydrogen with natural gas could serve as a big booster shot, which could be facilitated by framing blending mandates, regulations, and promoting H-CNG stations. In addition, to promote FCEVs, hydrogen fueling stations may be planned on dedicated corridors where long-distance trucking is widespread. Finally, the concept of carbon tariffs needs to be introduced on the lines of European countries.

In terms of supply also, a five-stage strategy should be prepared. First, investment in R&D must be accelerated so that its cost can be at par with fossils. Secondly, the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme aims to produce 15 MMT of compressed biogas, which can be achieved by exploring biogas conversion to hydrogen. Third, a Viability Gap Funding (VGF) scheme may be introduced for hydrogen based projects for commercialization and enhancement of emerging technologies. Further, to secure affordable financing, electrolyser manufacturing and hydrogen projects need to be brought under Priority Sector Lending (PSL). Finally, since the two major cost factors for green hydrogen are renewable energy tariffs and electrolyzer costs, and India has the advantage of one of the lowest renewable tariffs; The emphasis should be on reducing the cost of electrolysers by implementing the Production Linked Incentive (PLI) scheme. This can help India become a global hub for electrolyser manufacturing and green hydrogen.

On the transportation front, ammonia with high energy density could be promoted as a means of transportation. A hydrogen transportation system could also be built on the foundation built for natural gas using its existing infrastructure. Additionally, hydrogen transportation projects can be integrated with the PM Gati Shakti Master Plan.

Hydrogen could completely transform India’s energy ecosystem in the next few decades by shifting its trajectory from an energy importer to a major exporter. India can export to future anticipated import hubs like Japan, South Korea etc.

With hydrogen, India could lead the world in achieving the Paris Agreement goal of limiting global warming to 2°C compared to pre-industrial levels. Hydrogen can lay the foundation for a new India that will be energy-independent; A global climate leader and international energy power. In COP 26, Prime Minister Narendra Modi had given a clarion call Panchamrit (Five Goals), with an ambitious target of achieving Net Zero by 2070. Hydrogen will certainly play a decisive role in India’s Net Zero ambition and making India ‘Atmanirbhar in Energy’.

(Ramit Kalia is the Manager, Engineers India Ltd. Usha Suresh is the former Senior Economic Adviser, Ministry of Petroleum and Natural Gas)