Energetica India Magazine December 2020

Green Hydrogen Can Compete on Costs with Fossil Fuel by 2030: Report Renewable-Led Hydrogen Cost Could Fall Over 50% by 2030; 5-Fold Demand Up by 2050: TERI Hydrogen produced with renewable electricity could compete on costs with fossil fuel alternatives by 2030, according to a new report from the International Renewable Energy Agency (IRENA). The report further explained that a combination of falling costs for solar and wind power, improved performance as well as economies of scale for electrolysers could make it possible. Green Hydrogen Cost Reduction: scaling up electrolysers to meet the 1.5 C climate goal looks at drivers for innovation and presents strategies that governments can peruse to reduce the cost of electrolysers by 40 per cent in the short term and by up to 80 per cent in the long term, added the report. Green hydrogen could play a critical role in decarbonisation strategies, particularly so where direct electrification is challenging in harder-to-abate sectors, such as steel, chemicals, long- haul transport, shipping and aviation. However, regulations, market design and the costs of power and electrolyser production are still major barrier to the uptake of green hydrogen. Commenting on the report, Francesco La Camera, Director-General of IRENA, said that “renewable hydrogen can be a game-changer in global efforts to decarbonise our economies.” “Levelling the playing field to close the cost gap between fossil fuels and green hydrogen is necessary. Cost-competitive green hydrogen can help us build a resilient energy system that thrives on modern technologies and embraces innovative solutions fit for the 21st century,” La Camera added. IRENA further said that, today, green hydrogen is 2-3 times more expensive than blue hydrogen, produced from fossil fuels in combination with carbon capture and storage (CCS). The demand for hydrogen in India can grow five-fold by 2050. Further, by 2030, the costs of “green hydrogen” from renewables will fall more than 50 per cent and start to compete with hydrogen from fossil fuels. These were the findings of The Energy and Resources Institute (TERI) report titled “The Potential Role of Hydrogen in India”, was created under TERI’s Energy Transitions Commission (ETC) India programme. Commenting on the report, Will Hall, Fellow, TERI, and one of the report authors, said that “this is a first-of-its- kind, cross-sector assessment of how hydrogen technologies can support the transition to a zero-carbon energy system in India.” The report says that hydrogen needs to be targeted in sectors where direct electrification is not possible. These are heavy-duty, long-distance transport sectors, some industry sectors, and long-term seasonal storage in the power sector. In transport, battery electric vehicles (BEV) will become competitive across all segments, except for very long-distance, heavy-duty transport, which could be fuelled by hydrogen. In the power sector, hydrogen could provide an important source of seasonal storage for variable renewables like solar and wind energy. Large amounts of seasonal storage will become necessary only when the share of wind and solar in total generation reaches very high levels (60-80 per cent). Further, green hydrogen production could require around 1000 TWh of renewables-based electricity by 2050, placing further pressure on power system decarbonisation. “The falling cost of hydrogen will drive its uptake, with initial scale-up being driven by collaborations between progressive public and private players… India has an opportunity to grow an economically competitive low carbon hydrogen sector that can spur job growth reduce energy imports, whilst drastically reducing emissions,” said Dr Ajay Mathur, Director General, TERI. 11 energetica INDIA- December_2020 NEWS MARKET REPORT