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Explained: The hydrogen economy and how India plans to steer it

Explained: The hydrogen economy and how India plans to steer it

Explained: The hydrogen economy and how India plans to steer it
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By CNBCTV18.com Nov 23, 2021 7:30:54 PM IST (Published)

India's ambitious drive for green hydrogen involves a Rs 15,000-crore PLI scheme for electrolyser production. The ultimate aim of the government is to bring down the cost of green hydrogen to $1 per kg.

Hydrogen has often been touted as a fuel of the future. Hydrogen has the potential to create limitless, emission-free, efficient energy. Amid a global push for alternative sources of energy to the currently dominant fossil fuels, hydrogen is often a leading contender. 

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It can be used in many of the same devices that use carbon-based fuel like internal combustion engines (ICE), and it can even power hydrogen fuel cells for highly efficient and clean electric use cases. Hydrogen can also use the existing infrastructure to be stored and transported through the country if needed.
Already, governmental measures in the UK, the US, the UAE and others have seen companies pledge to use hydrogen to decarbonise their energy systems and economies. India is no different, with Prime Minister Narendra Modi pledging on Independence Day, August 15, that India will become a hub of green hydrogen manufacturing under the ‘National Hydrogen Mission.’
Amidst the challenges that the world faces to reach net-zero in time to prevent global climate catastrophe, the quick uptake of the hydrogen economy may be a critical goal to reach.
What is the hydrogen economy?
The hydrogen economy refers to using hydrogen, as both a fuel and in fuel cells, to decarbonise economic sectors which are hard to electrify or switch to other alternative sources of power. Vehicular emission, aviation, shipping, utility and heating are some of the sectors where hydrogen can have the best benefits.
Unlike fossil fuels, when hydrogen is used as a fuel instead of hazardous greenhouse gases, the only by-product is water vapour. Hydrogen for this reason is considered a great alternative source of energy in an economy that uses low to no carbon.
What is the problem with hydrogen?
Apart from infrastructure issues that prevent the large scale adoption of hydrogen, the most debilitating setback to hydrogen is the energy required to process it. Hydrogen is notoriously difficult to extract. The lightest element in the universe usually is found in water and hydrocarbons, the elements that make up fossil fuel, among many other substances.
Extracting hydrogen from water, H2O, is notoriously difficult since the water molecule is so stable and subsequently requires quite a lot of effort and energy, which usually comes from renewable sources. This hydrogen extracted by using this process is known as green hydrogen.
Other methods of hydrogen extraction include the burning of coal oil to produce brown hydrogen, using bituminous tar to produce black hydrogen, using methane or natural gas (CH4) to produce grey Hydrogen. Blue hydrogen is extracted using the same method as grey hydrogen, with the added step of capturing and storing the carbon dioxide released into the ground. It was held as being a cheap yet clean alternative to green hydrogen, which is still extremely expensive to extract.
Recent studies have shown that the hidden emissions behind the energy required to extract hydrogen using other methods, often result in greater emissions than using fossil fuels in the first place.
What is the next step?
Using carbon capture and storage (CCS) methods, along with improved methods of hydrogen production can allow it to be more emission-efficient as a fuel so that it can serve as a bridge to carbon-free fuel sources. As the share of renewable energy increases in the global power grid, the availability of green hydrogen will increase as well, thus making it more easily accessible and affordable.
The true goal of the hydrogen economy is to reach a stage where green hydrogen is affordable and accessible to the point where it starts to penetrate into economic sectors to replace carbon-based fuel sources.
What is India doing for the hydrogen economy?
The changes needed to accelerate the creation and adoption of green hydrogen call for a global effort. Already many countries are making that effort and India is one of them.
The viability and economic benefits of switching to a hydrogen-based economy have been long researched in India, with the country currently spending billions on fuel and energy.
India’s ambitious plans of installing 450 GW of renewable energy capacity will only fuel its drive to become the global hub of green hydrogen manufacturing.
CNBC-TV18 learned from sources that a Rs 15,000-crore production-linked incentive (PLI) scheme was being worked on to push for electrolyser manufacturing in India. The scheme is expected to run for a period of five years, starting from FY24. Sources also added that the government was also looking at setting goods and services tax (GST) at nil for domestically manufactured electrolysers for the five-year period.
The ultimate aim of the government is to bring down the cost of green hydrogen to $1 per kg and have five million metric tonnes per annum (MMTPA) green hydrogen capacity by 2030 in India.
India’s largest company and richest billionaire, Reliance Industries Limited and its CEO Mukesh Ambani, are also doing their part. Ambani’s recently announced that the green Energy Giga Complex will have an electrolyser factory for green hydrogen production, and a fuel cell factory. Ambani hopes that India can bring down hydrogen costs massively in the future. RIL hopes to become a net-zero emissions company by 2035, and a Rs 75,000-crore investment in green energy is a large part of the plan.
“Green hydrogen is the best and cleanest source of energy, which can play a fundamental role in the world’s decarbonisation plans. Efforts are on globally to make green hydrogen the most affordable fuel option by bringing down its cost to initially under $2 per kg. Let me assure you all that Reliance will aggressively pursue this target and achieve it well before the turn of this decade. And India has always set and achieved even more audacious goals. Am sure that India can set an even more aggressive target of achieving under $1 per kg within a decade. This will make India the first country globally to achieve $1 per 1 kilogram in 1 decade – the 1-1-1 target for green hydrogen," he said.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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