4 min read.Updated: 08 Sep 2021, 12:41 AM ISTAjit Ranade
This source of energy has gone from hype to hope and clarity on policy could transform India’s future
In his Independence Day speech, the Prime Minister announced five key initiatives, the first being Mission Hydrogen. He outlined a vision of becoming a global leader and enabling a substantial domestic hydrogen economy. Hydrogen has the promise of transforming India from an energy-deficient to an energy-rich country. It can even make India a net exporter of energy. Hydrogen is considered one of the most sustainable fuels of the future. When you burn it, you get water vapour, with no residue or climate-harming impact. Its promise has been known for decades. But recent developments make it possible to go from hype to hope. This has to do with a confluence of factors like declining costs, breakthroughs in technology and carbon taxes, as happened for other renewables. The challenge has been to make “green hydrogen", which was the thrust of the Prime Minister’s proclamation. For it, a lot of energy for the electrolysis of water is needed. Unless this electricity is produced with a zero-carbon footprint (i.e. with solar or wind), it defeats the key aspect of ‘green’ hydrogen. All other modes that do not use electrolysis to break a molecule of water are methods where hydrogen is produced as a by-product, or through a carbon-burning process. Thankfully, India is blessed with all-year sunshine. Solar-to-hydrogen also solves an intermittence problem, as hydrogen substitutes the need for battery storage. The current global production of hydrogen of about 80 million metric tonnes, and is almost wholly produced through fossil fuels. It uses 6% of global natural gas and 2% of coal, and contributes a whopping 830 million tonnes of carbon dioxide. Thus, this route to hydrogen is a non-starter. Things are changing as a major energy transition takes place worldwide toward renewables. This will be aided by emerging high carbon taxes, of which a major ‘adjustment import tax’ has already been announced by the European Union (EU). In the coming years, there may very well be an inflexion phenomenon that will catapult hydrogen from fringe to mainstream status. It is not as if such dramatic transformations have not been witnessed in India. As India’s pre-eminent scientist Raghunath Mashelkar points out, the roll-out of Jan Dhan Yojana no-frills bank accounts reached 400 million in just a few years. In data usage, India has leapfrogged from the bottom to top global ranking in a short time. In LED usage, India’s market grew by 130 times in five years, from annual sales of 5 million LED bulbs in 2014 to 670 million in 2018. The exponential scale effect in these examples has had a significant influence on bringing down unit costs. For instance, the price of an LED bulb dropped by nearly 85% in five years. India’s dramatic drop in data prices is also well known. So a similar snowball phenomenon in hydrogen is possible. The main route seems to be through electrolyzers (although there are several competing technologies). As per a McKinsey report, in the past two years, 70 gigawatts of electrolyzer capacity projects have been announced. This represents a 20-fold rise. This kind of momentum and scale would mean that capital costs per kilowatt for electrolyzers could drop by 65%. The drop in capital expenditure for hydrogen-based fuel cells could be even more dramatic. The cost of producing green hydrogen could drop below $2 per kg in 10 years, if accompanied by scale, both in production and consumption. Reliance Industries Ltd has recently announced plans to build large-scale, low-cost and high-efficiency electrolyzers as part of its $10 billion renewables push.