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Business News/ Opinion / Views/  Green hydrogen has got a spark that it deserves

Green hydrogen has got a spark that it deserves

Innovation to reduce its cost of production could see India lead this emerging field of clean energy, which would help not just decarbonize our economy but also enlarge our policy space

Photo: PTI

India’s push for green energy has received a fresh impetus with the Union cabinet this week approving an outlay of 19,744 crore for the National Green Hydrogen Mission. A big chunk of it will go to the Strategic Intervention for Green Hydrogen Transition initiative for the production of green hydrogen and manufacture of electrolysers (needed for it), while some money has also been earmarked for pilot projects as well as research and development (R&D). The Mission’s goal is to take our annual green hydrogen output to 5 million tonnes by 2030, attracting investments worth 8 trillion and creating 600,000 jobs along the way. These are worthy targets to chase. With decarbonization a big policy focus around the world, India too must move rapidly in that direction. Green hydrogen stands out as it holds the promise of global leadership. As the industry is still nascent worldwide, the race has only just begun. While the EU, US and others have allocated big budgets for cleanly made hydrogen that can fuel vehicles, furnaces and other fuel-guzzlers, we have had mega projects announced by India Inc that reveal dramatic ambitions. It’s a buzzy field for good reason.

India’s push for green energy has received a fresh impetus with the Union cabinet this week approving an outlay of 19,744 crore for the National Green Hydrogen Mission. A big chunk of it will go to the Strategic Intervention for Green Hydrogen Transition initiative for the production of green hydrogen and manufacture of electrolysers (needed for it), while some money has also been earmarked for pilot projects as well as research and development (R&D). The Mission’s goal is to take our annual green hydrogen output to 5 million tonnes by 2030, attracting investments worth 8 trillion and creating 600,000 jobs along the way. These are worthy targets to chase. With decarbonization a big policy focus around the world, India too must move rapidly in that direction. Green hydrogen stands out as it holds the promise of global leadership. As the industry is still nascent worldwide, the race has only just begun. While the EU, US and others have allocated big budgets for cleanly made hydrogen that can fuel vehicles, furnaces and other fuel-guzzlers, we have had mega projects announced by India Inc that reveal dramatic ambitions. It’s a buzzy field for good reason.

The science of making green hydrogen is simple. The oxygen and hydrogen of water can be split by electricity via a process called electrolysis. If done with power generated without emissions, it qualifies as ‘green’. And if the hydrogen thus produced is captured for use, it can be oxidized—or ‘burnt’—in a chamber to run an engine, say, without any carbon exhaust. What sounds like an ideal way to decarbonize transport and other sectors like steel, however, also happens to be prohibitively expensive right now. The global race is relying on innovation to get its cost down to viability levels across multiple use cases. Not only have well-resourced investors like Reliance and Adani (along with Total of France) entered this field with huge investments planned, other private players like JSW Energy, Larsen & Toubro and ReNew Power have been active as well. State-run energy majors Indian Oil and NTPC have plans too. Can all this money and rivalry make the most of Indian R&D talent to set off another kind of green revolution?

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Right now, it takes us an estimated 300-400 to produce a kilogram of green hydrogen. This must be brought down to under 100 for Indian output to be globally competitive. Reliance set $1 per kg within a decade as its aim. For a chance of taking world leadership, India will need to ascend the innovation curve faster than other energy players. As costs are key, it would take high efficiency across an entire ecosystem—with every link of the supply chain kept secure—that includes cheaply made but dependable electrolysers. As their local manufacture needs a boost, it’s logical for the Centre to extend production-linked incentives to this sector, even as it promotes the adoption of this fuel to generate demand. This thrust could pay the country back over the decades ahead in a significant way if it goes beyond reducing our economy’s carbon intensity to relieve our dependence on fossil-fuel imports as well. For decades, a domestic energy deficiency has been a constraint on India’s emergence. Should technology widen the country’s fuel choice set, we would also get more space to manage our external trade balances, which in turn would lend us policy flexibility as we globalize. Right now, we have a large and volatile oil bill to worry about. Cutting-edge R&D that delivers low-cost green hydrogen could change that.

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