Hydrogen produced using renewable power is starting to sell for less than that made with natural gas in India, according to a producer there.
The country is reliant on imports to meet its demand for natural gas, and that expense is reflected in the price of so-called gray hydrogen. That may be tilting the balance in favour of the green version, which has typically been far costlier to produce.
“For some 20-year contracts, we have priced green hydrogen below gray hydrogen, and we are still making money on that,” Anshul Gupta, co-founder of Hygenco Green Energies Pvt Ltd., said in an interview. Gray hydrogen fluctuates between $2.70 and $4 a kilogram, making renewables an attractive alternative.
Green hydrogen has been touted as a tool to cut carbon emissions in industries such as steelmaking and chemicals, as well as transportation. But it sells for about $3 to $7 a kilogram globally, with recent estimates suggesting costs could be even higher when taking storage and distribution into account.
India aims to lower prices to $1.50 and raise annual output to 5 million tons by 2030, from negligible volumes today. To achieve that, it has announced a slew of incentives and is considering cutting import duties on the machinery needed.
Hygenco has two projects in operation and a third expected online by year’s end — targeting annual output of about 150 million kilograms by 2030 — but that’s still a tiny volume when compared with India’s targets.