Building a Hydrogen Empire

 

The Transition to Hydrogen Economy: Prospects of The National Hydrogen Mission

On India’s 75th Independence Day, Prime Minister Narendra Modi announced the launch of the National Hydrogen Mission (NHM) with an aim to make the country a global production and export hub for green hydrogen. The National Hydrogen Mission was first announced in the Budget (February) which said the mission will draw up a road map for using hydrogen as an energy source. There is no doubt that hydrogen is the fuel of the future, why else would the EU, as part of its Green Deal, plan to shovel 470 billion euros into electrolyser infrastructure? Why else would China, Japan and South Korea be placing huge bets on the gas?

In the Asia-Pacific, Japan and South Korea are on the front foot in terms of hydrogen policy making. Our neighbor China too has made huge advancements in this sector. Currently, India imports 85% of its oil and 53% of gas demand, spending ₹12 trillion annually to meet the energy needs. To achieve the dream of an ‘Atmanirbhar Bharat’ the government plans to make India energy independent by 2047.

Green Hydrogen

Hydrogen is the most abundant element in the universe. But on Earth it is found in complex molecules such as water or hydrocarbons. Hydrogen is not a source of energy like fossil fuels, but an energy carrier, which means it has to be extracted and stored before it can be used. Depending on the method of extracting hydrogen, the hydrogen produced is classified as ‘grey’, ‘blue’, or ‘green’ hydrogen. A majority of the hydrogen (96%) is produced from fossil fuels via carbon intensive processes (like steam reforming of methane and natural gas). Hydrogen produced in such a manner is called Grey Hydrogen as it leads to a lot of green house gas emissions. Grey hydrogen becomes ‘blue’ hydrogen when the CO2 given out during its production is locked up through carbon capture and storage (CCS) processes.

‘Green’ hydrogen is any hydrogen that is produced from clean energy sources like renewables using technologies like proton exchange membrane (PEM) hydrogen electrolyser. It is released via electrolysis of energy from renewable sources. Though it gives rise to no CO2 emissions, it is expensive and not commercially viable yet. With the current cost of green hydrogen estimated at around ₹350 per kg, the plan is to more than halve it to ₹160 per kg by 2029-30 as the cost of alkaline electrolysers is projected to drop from around Rs. 6.3 Cr/MW today to around Rs. 2.8 Cr/MW by 2030. The government also aims to extend the production-linked incentive scheme for manufacturing electrolysers to produce green hydrogen.

Prospects of Hydrogen Economy

Wherever hydrogen replaces fossil fuels, whether in a fuel cell or burned to create heat, it slows global warming. The by-product of burning hydrogen is water. The World Energy Council (WEC) says that “combusting one kilo of hydrogen releases three times more energy than a kilo of gasoline and produces only water". Then, there are hydrogen fuel cells (an electrochemical cell that converts the chemical energy of hydrogen and oxygen into electricity), whose waste product, again, is water. Fuel cells can produce electricity continuously for as long as hydrogen and oxygen are supplied. The usage of hydrogen will not only help India in achieving its emission goals under the Paris Agreement, but will also reduce import dependency on fuels.

Hydrogen Fuel Cell Electric Vehicles (FCEVs) will compete with the Battery Electric Vehicles (BEV) to achieve transport decarbonization. BEVs will dominate most of the smaller, shorter-range passenger vehicles, including two, three, and four wheelers, as well as city buses and last-mile freight. However, FCEVs could remain competitive in longer-distance, heavier-weight vehicle segments, such as heavy-duty trucking.

Apart from transportation, it can be a “decarbonizing agent" for industries like chemicals, iron, steel, fertilizer and refining, transport, heat and power. With a concerted policy push, it may be possible to foster a domestic methanol industry based on green hydrogen. As of 2017, the iron and steel industry produces 7-9% of the total global GHG emissions. In 2017, every ton of steel produced 1.53 tones of CO2 emissions. If hydrogen is used in this process, then steel making process can become completely emission-free, creating ‘green steel.’

 

As India shifts towards solar and wind-based electricity, more electricity storage will be required to manage the variability of renewables. Improvements in battery technologies may provide cost-effective short-term storage. However, as the grid reaches higher shares of variable renewables, there will be fewer coal-fired plants that are able to manage the longer periods of demand and supply variation, such as low wind output during the winter months. As a result, hydrogen could play a role as a long-term storage vector, absorbing excess electricity during certain periods of the year, to be used again at times of sustained low renewable output.

Recent Developments

According to industry data, the world is currently producing around 70 million metric tonnes of hydrogen, out of which 6 MT is coming from India. India is considering a proposal to make it mandatory for fertilizer plants and oil refineries to purchase green hydrogen so as to cut the nation’s dependence on fossil fuels. The government plans to implement the Green Hydrogen Consumption Obligation (GHCO) in fertilizer production and petroleum refining, similar to renewable purchase obligations (RPO), which requires electricity distribution companies to buy a fixed amount of renewable energy. In September 2020, 18% blend of Hydrogen with CNG (HCNG) was notified as an automotive fuel. 50 buses have been rolled out as part of a pilot project in Delhi that use blended hydrogen in compressed natural gas (CNG).

Two hydrogen refueling stations have been established at Indian Oil R&D Centre, Faridabad and National Institute of Solar Energy, Gurugram. ACME Group has recently commissioned the world’s first integrated commercial-scale pilot plant for green hydrogen production in Rajasthan and the plant will help in saving around 4,400 tones of CO2 emissions every year. JSW Energy is partnering with Australia-based Fortescue Future Industries on green hydrogen for steel making and hydrogen mobility. Indian Oil has announced plans to build the country's first green hydrogen plant at its Mathura refinery. And BGR Energy has launched a new partnership with Ireland’s Fusion Fuel Green on a demonstrator plant for cost-competitive green hydrogen. In addition, a number of companies have set up the India Hydrogen Alliance, led by Reliance Industries. 

This initiative on green hydrogen can help us build an ecosystem of a 2-3 trillion-dollar industry in the next 20-25 years. As per estimates and net-zero targets being taken by various countries for 2030 and 2050, the green hydrogen ecosystem will be a $12-13 trillion industry by 2050. It can be an excellent opportunity for India to become a significant exporter of green hydrogen, helping the world reduce carbon emissions and creating local jobs and wealth.