Green hydrogen and india’s transition to clean energy

(Mains GS 3 : Science and Technology-Recent developments and their applications and effects in everyday life)

Context:

• Energy is a master resource which has the ability to catapult or cripple a growing economy. 
• The rising threat of climate change has transitioned from climate-science conferences to billions being spent on disaster relief expenses. 
• Realizing the impending threat to their economies, several countries have announced net-zero targets.

The energy sector:

• Electricity dominates the public discourse on the energy economy, however it accounts for only 18% of India’s total energy demand. 
• The rest 82% comprises other energy sources such as coal, oil and gas, and biomass. Unfortunately, our energy sector is heavily import-dependent (85% for crude oil, 53% for gas and 24% for coal).
• The volatility in the prices of these fuels has a huge impact on the import bill, to the tune of $160 billion. 
• These numbers will double over the next decade as demand grows.

India needs sustainable energy:

•  According to the International Energy Agency (IEA), India will overtake the European Union as the world’s third-largest energy consumer by 2030.
•  In its recent forecast, India will account for the biggest share of energy demand growth over the next two decades.
•  This will create challenges for India  but also opens new avenues of growth. 
• India has the potential to completely re-imagine its energy economy in consonance with demand for clean and sustainable products. 
• This can be achieved by leveraging the results of decades of innovation in the clean energy sector. 
• In the process, India can show the way to developed countries that sustainability and rapid growth can go hand-in-hand.

Green hydrogen and India:

• Green hydrogen (H2) is made by splitting water (H20) via renewable power.
•  Over time, green hydrogen, as an energy carrier, can replace some of India's energy imports. 
• This is feasible, given India’s record-low renewable power prices ( ₹1.99/$2.7 cents per kWh). 
• The Global Hydrogen Council has in a recent study classified India as a net exporter of green hydrogen from 2030, thanks to cheap renewable tariffs. 
• Hydrogen is also a chemical feedstock with an existing global market of about 70 million tonnes. 
• India already consumes about 6 Mt of hydrogen (8.5% of the global demand) annually that is made by reforming 18 Mt of import-dependent natural gas.

Green hydrogen plays greater role in India’s development transition:

• Recently more than 25 nations have set up roadmaps for green hydrogen, including mandates and financial incentives to accelerate the transition to it. 
• Wind and solar energy can provide the electricity to power homes and electric cars, but green hydrogen could be an ideal power source for energy-intensive industries like refining, steel, cement, heavy mobility and industrial heating. 
• India is the world’s third-largest emitter, with 3.6 gigatonnes of Co2 equivalent across sectors, and green hydrogen will have to play a role in our development transition.

India’s renewable energy target and green hydrogen:

• Green hydrogen is critical to meet India’s ambitious target of 450 gigawatt of renewable energy by 2030. 
• Due to surplus generation of renewables in peak-generation hours, with further addition of renewables to its power grid, India will face a ‘duck curve’, as experienced by California. 
• To utilize cheap solar power, currently at ₹2.0/kWh, we need to find other uses for solar power during its generation hours. 
• Through the scaling up of green hydrogen from renewables, India will require a significant amount of renewable energy capacity addition to help India march towards its 450 GW target. 
• Electricity typically accounts for 70% of the production cost of green hydrogen. 
• Hence, surplus electricity from India’s renewable plants can augment green hydrogen economics and this will also protect the grid.

Learnings from other countries:

• West Asian countries, Chile and Australia are aiming to become major players in green hydrogen. 
• An energy consortium in Australia has announced plans to build a project called the Asian Renewable Energy Hub in Pilbara.
• This project would use 1,743 large wind turbines and 30 square miles of solar panels to run a 26-gigawatt electrolysis factory that would create green hydrogen to be sent to Singapore. 
• India can learn from global trends and leverage its vibrant clean energy industry to shape its green hydrogen market.

New avenues of growth:

• Green hydrogen is a sunrise industry and will enable Indian entrepreneurs to capture new avenues of growth. 
• Locally-available green hydrogen can attract high-value green industries, like green steel and green chemicals, to shift production to India. 
• Localization of electrolyzer production and development of Green-H2 projects could create a new green technology market worth about $18-20 billion in India and generate domestic jobs. 
• In addition, there is a massive opportunity to create regional hubs to export high-value green products and engineering, procurement and construction services.

Way forward for india:

• To build a global-scale green hydrogen industry, India needs a holistic approach.
•  First, it should announce ambitious targets for green hydrogen and electrolyzer capacity by 2030 on similar lines as renewables. 
• Second, mandate blending a certain percentage of green hydrogen with grey hydrogen for existing applications like oil refining and fertilizers, depending on the viability gap.
• India also needs to mandate new greenfield capacities of hydrogen applications like oil refining and fertilizers to use only green hydrogen from a future cut-off date (to avoid long term lock-ins). 
• Third, India should aim to build a vibrant hydrogen products export industry, such as green steel, using a phased manufacturing programme.
•  Fourth, India should form a regional alliance with South Korea, Japan and Singapore to export green hydrogen from coastal India to help them reach their net-zero ambitions. 
• Fifth, capital cost contributes around 30% of green hydrogen costs, and dollar-linked contracts for procurement of hydrogen should be explored in relevant demand sectors, as is done for oil and gas. 
• Last, India should plan to roll out a production-linked incentive scheme for electrolyzer manufacturing to address the huge global supply bottleneck.

Conclusion:

• Green hydrogen is the future of energy and it has the potential to radically reduce imports and catalyse India’s transition to climate-action leadership.