15 Jan 2024
In a bid to become a global export hub for green hydrogen and its derivatives, India is targeting 5 million metric tons per annum (MMTPA) of green hydrogen production by 2030, according to a report released today by The World Economic Forum in collaboration with Bain & Company. The move is strategic to curb the soaring energy import bill and align with India's ambitious net-zero goals.
Green Hydrogen: The Roadmap for India's Energy Future
India, currently the world's third-largest economy in terms of energy needs, faces a projected 35% surge in energy demand by 2030. To address this and reduce its reliance on energy imports that reached $185 billion in 2022, India is charting a course for a green hydrogen-driven future. The report, titled "Green Hydrogen: Enabling Measures Roadmap for Adoption in India," outlines the potential, opportunities, and a comprehensive roadmap for accelerating the adoption of green hydrogen in the country.
Export Potential and Global Competition
The report emphasizes that with affordable renewable energy, India can attract valuable international trade of green hydrogen derivatives. However, to boost export potential, it is crucial to establish recognized standards, improve export infrastructure, and form strategic partnerships. While India eyes becoming a leading exporter, competition is expected with countries like the USA, Australia, the Middle East, and South America, driven by their lower production costs.
Key Measures for Accelerating Green Hydrogen Ecosystem
Supply-Side Measures: Achieving cost-parity with grey hydrogen in production and delivery is essential. The report suggests reducing green hydrogen production costs, currently at $4–5/kg, to a net price of $2/kg or lower. This involves addressing cost drivers such as round-the-clock renewable energy costs and electrolyser costs. Storage, accounting for a significant portion of renewable energy costs, requires scaling up, and the costs of electrolyser technology can be reduced through innovation and increased scale.
Infrastructure Development:Â Green hydrogen requires dedicated and sometimes adjusted infrastructure for storage and transportation. In the near term, higher adoption is expected in industrial clusters. Encouraging the formation of hydrogen-based industrial clusters and providing incentives can accelerate the adoption of green hydrogen.
Demand-Side Incentives:Â Industries can be incentivized to consume green hydrogen instead of fossil-fuel-based energy sources. The report suggests targeted incentives to drive domestic demand, particularly among leading consumers of existing grey hydrogen, such as refineries and ammonia industries. Subsidies, cost waivers, and R&D support for domestic electrolyser technology are proposed initiatives.
Pathway to Decarbonization and Sustainable Future
As India aims for a 2070 net-zero goal, green hydrogen emerges as a vital component for meeting energy security needs and reducing emissions in hard-to-abate sectors. The roadmap involves a dual strategy of incentivizing green hydrogen adoption and discouraging carbon-intensive energy sources. Collaboration among central and state governments, industry, and academia is deemed crucial for India to excel in the global green hydrogen sector, driving necessary changes and innovations in this emerging energy technology.
In conclusion, India's focus on green hydrogen adoption not only addresses energy security and emissions reduction but also positions the country as a significant player in the global green hydrogen market. The ambitious targets set for 2030 reflect India's commitment to a sustainable and green energy future.