Green Hydrogen: The Fuel Redefining India’s Energy Security

The world generally appreciates and accolades heavy-weight. Who could have imagined that the lightest of all, invisible, non-sensory elements have the potential to reshape and redefine the energy landscape around the world and serve as a panacea to the ailments of our Mother Earth and her future generations?

It's obvious, we are talking about the hydrogen molecule, especially when generated by electrolysis of water energised through renewable energy. In the Indian context, it is more impactful because of three prominent reasons. The first being that, as a tropical climate, India is more prone to climate change impacts. The second is that India is a net importer of fossil fuels, be it crude oil or natural gas. In fact, we spend around USD 130 billion annually on importing these. Given the present geo-political scenarios around the globe, energy security and self-sufficiency are critical elements for the economic stability of the country.

With this clear opportunity to reverse or at least nullify the billions in outflow, it is very important to answer a few critical questions:

Among the priority sectors, there are two pathways:

1.    Choose the easiest and lowest hanging options, such as sectors that already use hydrogen today, albeit grey; and
2.  Target sectors that are import-dependent, where green hydrogen/derivatives can reduce the dependency. Also, any export-oriented sector facing decarbonisation mandates from other countries.

In pathway (a) lie oil refineries, fertiliser, chemical segments, etc. These segments have huge volumes, especially refineries and fertilisers. However, they lack techno-commercial motivation to decarbonise, given the fact that the cost of green hydrogen today is 3-4 times higher than grey hydrogen. The fertiliser sector is extremely regulated, subsidised, and sensitive to the agrarian economy.

In case of (b), these include the transport sector (road, rail, waterways, aviation) and metals (steel, aluminium, etc.). In transport, especially heavy-duty, waterways, and aviation, decarbonisation has direct savings on imports. In the case of metals, especially those exporting to Europe, there is a push to decarbonise due to the impending CBAM. The major bottleneck in (b) sectors is that their conventional methods do not use hydrogen as a fuel or source of energy. Although hydrogen’s gravimetric calorific value is 300n percent to 400 percent of petroleum products and coal, the cost of conversion to green hydrogen/derivative-based systems is exorbitant. Even electrification of these processes is unviable. Therefore, these are called “hard-to-abate” sectors. Further, as these are the backbone of the economy, any cost change may have a snowballing inflationary impact across all commodities.

This brings us to the aspect of how to bring the change without causing a jerk in the economy. A few simple solutions, like in case (a) sectors, mandating off-takers for the adoption of green molecules may work. However, in the case of (b), mandating will not work for the reasons mentioned above. It needs government financial support such as capital subsidies, GST waivers, transmission charge waivers, banking support, and concessions on land, water, etc. Further, as these subjects are central, state, or concurrent, very good coordination and synchronism are needed between central and state governments to make this mission successful. The above supports will encourage private investment, the setting up of manufacturing in India, and de-risking of the supply chain.

Lastly, the biggest question is how to make it sustainable, as subsidies can’t be given forever. With Bharat being traditionally an application-oriented economy moving towards a manufacturing-based one, the real answer lies in invention/innovation orientation. The developed economies are a testimony to this. With a huge pool of science graduates/postgraduates, technically acclaimed research institutes, and the recent announcement of INR 1 lakh crore (USD 12 billion) in R&D in such core sectors (which I used to request the government through various forums as I3 (I Cube) – “Invent in India” Mission and ILI (Invention Linked Incentive)), we have the potential to transform Bharat. We can create intellectual capital through inventing. For example, can’t we invent electrolysers that are >95 percent efficient as compared to 65 percent today? This can directly reduce the RE need by 30 percent for the same throughput! Through such innovation/invention orientation, Bharat can truly transform itself into a developed economy by 2047 and achieve net zero by 2070.

 -Sudhir Pathak, Head- Central Design & Engg (CDE), Green Hydrogen Tech, Hero Future Energies