Why India Dreams of Becoming a Global Green Hydrogen Hub? Is it Possible?

Energy is the fundamental requirement for sustaining our modern society. Today, crude oil is the single largest traded commodity in the world, and the trade in energy, both domestic and international, constitutes one of the largest portions of the global GDP.

The ever-increasing global energy consumption and use of fossil fuels is also the biggest existential threat to the modern society. Pollution, environmental degradation, and climate change have become the primary concern for all countries of the world. The ideal solution lies in replacing all polluting energy sources with clean renewable energy.

Clean electricity is the best form of renewable energy, and hydrogen has been acknowledged as the ideal solution for transporting clean electricity over vast distances and across the seas. Hydrogen generated from renewables, or Green Hydrogen, is a zero-emission fuel which has utility in several sectors of the economy, including industry, transportation, steel, and most importantly, hydrogen can become an important globally traded commodity. It is, therefore, not surprising that all the major economies of the world have prepared their hydrogen production and distribution plans, aiming to become a global player in this new emerging clean energy trade.

India has announced its ambitions in hydrogen and is taking steps to evolve itself into a global hydrogen hub for the production and export of hydrogen and its derivative clean energy products, like green ammonia and methanol. Prime Minister Narendra Modi announced from the ramparts of the Red Fort that green hydrogen would give India a ‘quantum jump’ in its efforts towards climate-oriented goals. In his address at the UN General Assembly, PM Modi reiterated his plans for developing a hydrogen economy in India and making India the largest green hydrogen hub in the world.

The question then arises is whether India has the potential to produce green hydrogen in the quantities that would be required to compete globally and at a price which would make Indian hydrogen commercially lucrative.

Renewable energy production is growing at a tremendous rate in India. By 2030, the nation aims to install 450 GW of renewables capacity and in the year 2021 we achieved 100 GW of installed renewable capacity. Solar power generation capacity is the fastest growing new energy installation in India and also in the world. Cost of electricity produced using solar power in India is the cheapest in the world and scaling it up would likely reduce the costs even further. Offshore wind energy projects are still at a nascent stage in the country however, they have a huge potential to produce low-cost clean energy to help us meet the targets of 2030. Small hydro-power stations, biomass, and wave technology are also available to us in adequate capacities.

With such huge renewable power capacity, India can readily invest in producing green hydrogen. The National Hydrogen Energy Mission which was launched recently has already proposed purchase obligations for green hydrogen for industries such as oil refining and fertilizers. Other industries such as steel, chemicals, and transport will also be required to use green hydrogen either directly or in a different form such as methanol or green ammonia.

The idea of an ecosystem powered by green hydrogen is not limited by geographical boundaries and domestic use. Several countries which would eventually adopt green hydrogen technologies are not ideally situated to satisfy their projected hydrogen demand by producing it locally and they will eventually become dependent on imported green hydrogen. This potential hydrogen trade is very attractive to India which currently relies majorly on importing energy to meet its demand. India has vast potential to divert its renewable power capacities to produce green hydrogen for the export market, making India a global green hydrogen hub.

The future of hydrogen in India can also be seen from the interest in hydrogen by Indian companies like Reliance Industries, Tata Group, Adani Group, Jindal, and more importantly, Indian Oil and NTPC. Pilot projects in hydrogen production, distribution, storage, and application have been already announced by these companies, and they are making massive investments in this sector to ensure they continue to have an edge in the energy business. Government policy in India is also extremely supportive of new investments in the hydrogen ecosystem and recently Indian enterprise can satisfy their renewable purchase obligations (RPOs) by purchasing green hydrogen.

As simple as it may sound, a shift to a clean energy ecosystem, is more difficult than what can be imagined. Hydrogen cannot simply replace existing fuel, even natural gas. In a pilot project in New Delhi by Indian Oil, 18% hydrogen was mixed with CNG to run 50 public buses for a period of six months. The results of this project will pave way for future long-term use of hydrogen mixed with CNG across all major cities in India. The shift to hydrogen will require changes in not only the infrastructure but also in terms of safety, consumer behavior, and skill development of millions of people currently working with fossil fuels.

The use of hydrogen requires a major shift in the existing energy infrastructure of the country or the region where hydrogen is proposed to be used. The major challenge then is finance, and for a developing country like ours, replacing existing infrastructure which has an available period of use, will not only become unfeasible financially, but also involve massive wastage of resources. India can consider developing new infrastructure in areas where none exists, but to dismantle existing good infrastructure would cause damaging consequences on the economy.

The other problem for India to evolve into a global green hydrogen hub is its existing energy deficiency. Producing hydrogen requires at least some amount of excess renewable capacity. India is energy deficient. Every watt produced by renewable or non-renewable sources is consumed and meeting the current energy demand is a challenge for the power sector, let alone diverting some of this power for producing green hydrogen for either domestic use or exports.

India’s gargantuan energy demand will only rise in the future and the government is focusing on several solutions all at once, natural gas, biomass, battery technology, flex fuel systems, methanol, blue and green hydrogen, electrification, etc. In such circumstances, the focus to build a green hydrogen hub is lacking. Several interest groups and stakeholders are vying for a larger pie for themselves and push emerging untested energy solutions in the backburner. A dedicated government mechanism to work exclusively on hydrogen may be able to reduce such distractions.

A major challenge which India and also the world will face while developing a hydrogen economy would be the geo-political resistance presented by the oil producing nations. The thought of a commodity replacing oil will not be readily accepted. Any disruptions in the oil & gas supply chains will be catastrophic to India’s economy and we will have to carefully progress in the direction of a clean energy economy. In the worst-case scenario, the outbreak of a war is also not far-fetched, and such an event will threaten climate conscious movements and cause massive setback in these efforts which may last for years.

India’s political stability is also a primary reason for the current spurt in clean energy initiatives. Without the need to please interest groups funded by oil companies, Indian renewable sector has seen a huge growth in the past few years. However, any political instability will give rise to vested interests which will certainly derail any green hydrogen plans.

The challenges for India becoming a green hydrogen hub may seem extraordinary, however, with a determined government and a complimenting industry India will be able to overcome any obstacle on its path to net-zero emissions by 2070.

- Ashwini Kumar, Green Hydrogen Expert