Unlocking India’s Potential

With the world’s eyes on the crucial COP28 climate summit in Dubai, India has firmly cemented its commitment to ambitious decarbonization efforts. Read on…

As the third largest emitter globally, India aims to reach net-zero carbon emissions by 2070 through rapid adoption of renewables across sectors. In attendance amongst global leaders, India’s Prime Minister Narendra Modi highlighted several key milestones already achieved but called for further international cooperation and financing to accelerate progress. Domestically produced green hydrogen – created by splitting water via electrolysis using renewable electricity – is poised to play a pivotal role across transport, industry, refining and beyond.

This article explores India’s plans and advancements on solar-based green hydrogen, examines production pathways and technologies, analyses costs and applications, discusses policy enablers, highlights innovative projects and outlines what’s needed to realize India’s sizable potential as a leading green hydrogen hub powered by its vast solar capacity.

Green Hydrogen’s Crucial Role in Decarbonization

Green Hydrogen is emerging as an indispensable tool for eliminating greenhouse gas emissions from vital but challenging-to-abate sectors like heavy transport, chemicals, iron and steel where direct renewable energy electrification faces limitations. Green hydrogen production has witnessed surging momentum globally – thanks to falling renewable energy costs and electrolyzer technology innovations.

Green hydrogen is produced by splitting water into hydrogen and oxygen using renewable electricity via electrolysis. This process generates no carbon emissions – unlike dominant ‘grey’ hydrogen currently made using fossil fuels. For countries like India with ambitious net-zero targets, domestically produced green hydrogen at scale will be vital across various sectors.

India’s Green Hydrogen Roadmap

In January 2023, the Indian Government officially launched the National Green Hydrogen Mission, outlining a comprehensive national strategy to establish domestic production and foreign exports at mass scale this decade. With a budgetary outlay of Rs 19,744 crore, the mission aims for India to reach 5 million metric tonnes of annual green hydrogen output by 2030 across transport, gas grids, refining and fertilizers. This would cut fossil fuel imports while creating 1 million new clean energy jobs. Phased milestones look to catalyze research, pilot projects and policy frameworks in the short term before focusing on commercialization and global leadership through international partnerships in the long term.

Alongside domestic usage, exports of cost-competitive green hydrogen present a major economic opportunity for India to supply growing global demand. India’s immense solar and wind resources offer natural advantages for inexpensive green hydrogen production at mass scale. India also boasts a plum strategic location near lucrative
Asian and European export markets hungry for imports as they pursue net-zero pledges.

Solar Power’s Crucial Role

India stands out in the global green hydrogen arena due to its exceptional solar power potential, harnessed from vast expanses of unutilized, arid land, particularly in renewable energy parks across Rajasthan, Gujarat, and Karnataka. As of 2023, installed solar capacity has soared past 75 gigawatts, driven by highly competitive market auctions, and is poised to continue expanding to meet 2030 targets. This abundant solar electricity will serve as the cornerstone for electrolytic green hydrogen production pathways. Solar’s strength lies in its higher capacity factors compared to wind (averaging 25% vs 17% in India), ensuring a steadier hydrogen output. Plummeting solar tariffs have also reached record lows, approaching `2 per kilowatt-hour in recent years, making the electricity feedstock exceptionally cost-competitive.

Hydrogen Production Pathways

There are two primary production methods for generating green hydrogen from solar power:

  • Direct coupling: Solar PV or Concentrated Solar Power (CSP) systems directly power co-located electrolyzers to produce hydrogen as output. This tightly integrated approach benefits from avoiding grid transmission losses.
  • Indirect coupling: Grid-connected solar power stations transmit electricity to electrolyzers potentially located many miles away at hydrogen production hubs with access to distribution infrastructure. This model allows using far larger solar capacities to power electrolysis.

Each approach has pros and cons regarding costs, production flexibility, location constraints, modularity scalability and infrastructure needs. India aims to leverage both production models – but the economics tend to favour building ultra-large solar parks in sunny, arid regions with high direct normal irradiance to provide dedicated power for centralized green hydrogen manufacturing hubs.

Key Electrolysis Technologies 

Several electrolysis technologies are commercially available for splitting water to produce green hydrogen using solar electricity, with varying maturity and cost-competitiveness:

  • Alkaline Electrolysis Cells (AEC): AEC is the most established and widely deployed electrolysis chemistry using potassium or sodium hydroxide electrolytes. Module sizes range from small to very large. Efficiency is typically 65-80%. Capital
    costs for large AEC systems approach around $650 per kW.
  • Proton Exchange Membrane (PEM): PEM electrolyzers benefit from higher power densities, rapid response times, and increased flexibility to input fluctuations – at a higher price point. Efficiency reaches 60-85%. Large PEM systems have capital costs of approximately $800 per kW presently.
  • Solid Oxide Electrolysis Cells (SOEC): SOEC efficiency can exceed 90% for converting electricity to hydrogen thanks to high operating temperatures. This emerging technology shows great promise but has higher balance-of-system requirements. Current estimates put capital costs around $1,400 per kW.

Over this decade, rapid scale-up of manufacturing will help drive down electrolyzer costs across the board – with experts projecting 40-50% capital expenditure reductions possible.

Key Applications and Demand Drivers

The National Green Hydrogen Mission has outlined several key domestic sectors to target for green hydrogen adoption:

  • Transport: Decarbonizing aviation, shipping and heavy trucks for reduced fossil fuel dependence
  • Refining: Green H2 replacing grey hydrogen to upgrade crudes into lighter fuels
  • Fertilizers: Introducing green H2 into current grey ammonia production to cut emissions
  • Steel: Using green hydrogen as a reducing agent during iron ore processing
  • Power Generation: Flexible electricity output via hydrogen combustion in peaker plants

Other demand creation mechanisms involve blending green hydrogen into national gas grids and fuel cell vehicles. Beyond internal usage, developing exports will accelerate production and establish global leadership.

Cost Competitiveness Analysis

To achieve widespread adoption beyond niche applications, green hydrogen must reach cost parity with conventional grey production by the end of this decade. India’s abundant solar resources provide an extremely competitive source of renewable electricity for green hydrogen production. However, large-scale electrolysis and technological advancements will be crucial in driving down capital and operating expenses.

Expert forecasts indicate that green hydrogen costs could plummet from around 500 per kg today to120-150 per kg by 2030 as production volumes expand. At 120 per kg, green hydrogen would not only be competitive with grey production but also open up new opportunities in gas grid blending, freight transport, and other markets. Ambitious targets envision sub-50 per kg prices in the long run.

Recent advancements in electrolysis technology, such as the development of Anion Exchange Membranes (AEMs), have the potential to significantly reduce green hydrogen production costs. AEMs offer improved efficiency and reduced membrane costs compared to traditional Proton Exchange Membranes (PEMs), paving the way for more cost-competitive green hydrogen production.

Flagship Projects Pick Up Steam 

Such projects will drive vital experience, economies of scale, technology validation and infrastructure blueprint creation to guide wider build-out.

Location Siting Optimization

Siting large-scale green hydrogen manufacturing hubs requires assessing ideal locations through geospatial mapping – considering parameters like solar/wind potential, land availability, infrastructure connectivity, water access and electricity transmission logistics. Gujarat, Rajasthan and Karnataka have emerged as prime regions for development thanks to high direct normal irradiance solar resources and connectivity to major demand centres. Freeing up arid, non-agricultural public lands for mega solar parks to power production will also accelerate growth.

Policy & Regulatory Enablers

Harnessing India’s substantial green hydrogen potential demands concurrent policy advancements encompassing enabling infrastructure, financing, procurement targets, workforce development, and more. Key priority policy measures include:

  • Production and Domestic Transportation/Storage Financial Incentives: Implementing financial incentives to stimulate the production and domestic transportation/storage of green hydrogen will foster growth and adoption across the value chain.
  • Priority Industry Usage Mandates and Quotas: Establishing mandates and quotas for green hydrogen utilization across priority industries, such as refining, fertilizers, and steel, will create a robust demand base and drive market expansion.
  • Comprehensive Hydrogen Storage and Transmission Pipeline Networks: Developing comprehensive hydrogen storage and transmission pipeline networks will facilitate efficient transportation and distribution of green hydrogen, ensuring seamless connectivity and accessibility.
  • Zero Import Duties for Manufacturing Equipment: Eliminating import duties on manufacturing equipment specifically designed for green hydrogen production will reduce costs and encourage domestic manufacturing capabilities.
  • Low-Cost Debt and Public Capital Allocation: Providing access to low-cost debt and public capital allocation for green hydrogen projects will enhance project feasibility and attract investments, accelerating the sector’s growth trajectory.
  • Export Incentives and Trade Partnerships: Establishing export incentives and fostering trade partnerships with key global markets will position India as a leading exporter of green hydrogen, leveraging its competitive edge in the international arena.

Realising the Vision  

India is primed to capitalize on its vast solar resources to drive domestic decarbonization and capture export opportunities through solar-centric green hydrogen production. With supportive policies, rapid scale-up of electrolysis capacities powered by renewable energy parks, strategic public-private partnerships and resolution of early-stage commercialization barriers, India can deliver on its National Hydrogen Mission 2030 goals spanning transportation, refining, chemicals and beyond. Leadership across the entire value chain – from manufacturing equipment to operating export facilities – will also secure vital economic gains while cementing climate leadership. The necessary building blocks are firmly in place for India to realize its full potential as a global green hydrogen powerhouse.

Mrigendra Rai holds an MBA in Power Management from the National Power Training Institute, Faridabad, and Bachelor’s in Electrical Engineering from College of Technology and Engineering, Udaipur. He is a seasoned professional with over 10 years of experience in the renewable energy industry. As Client Manager at WiseEnergy, he oversees a large global solar portfolio across Europe, US and India. He leads efforts to optimize technical, commercial and financial performance of the assets, ensuring operational excellence to maximize output, reduce costs and deliver strong returns.

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