Reliance Chairman Mukesh Ambani has set an ambitious target of delivering 1 kg of hydrogen for $1 in 10 years in his speech at the International Climate Summit 2021. To decode all that he announced, CNBC-TV18 caught up with Arunabha Ghosh, CEO at Council on Energy, Environment and Water, and Doctor JP Gupta, chairman, Environment Committee, PHDCCI.
Currently, 175 gigawatts are expected by 2022 and the long-term national target is 450 gigawatts, of which 100 gigawatts coming in from Reliance itself. Are these targets realistic?
Gupta said he found the targets optimistic to the extent if "we are able to make development, particularly in indigenous capacity building."
“I am quite optimistic also, the way after the announcement by our Honourable Prime Minister about not only showing of laying a vision for the country for clean hydrogen but showing his commitment and taking before our national flag, I can tell you no PM in any part of the world can be so committed, so sincere about the green energy revolution, point number one, point number two being a crime quite involved.”
Secondly, all the government laboratories, private industry, they are actively involved in the development of electrolyzers technology, and in the coming year, the number of patents in innovation in green hydrogen will come from India, said Gupta.
He further added, "Though we are not to reinvent the wheel, because all big thinkers, Noble laureates from Japan, United States, from Europe have participated in this climate summit, India is not far behind. And now with our Prime Minister showing the commitment, and also supported by the policy advocacy, we procure or produce is a fantastic idea."
So, with all the industries coming in the domain of green hydrogen gradually, there is no doubt the visionary leadership of Prime Minister will make India almost like you know, Middle East for the fossil fuel or the crude oil, India will become the Middle East for the green hydrogen, Gupta added.
When asked what kind of investments are needed to make, specifically for green hydrogen, Ghosh said,” To just give an example, if we wanted to make green steel, we today make about 100 and 50 million tonnes of steel in the world, we are the second-largest producer after China. In a couple of decades, we will be looking at 300 million tonnes of street steel. Now if we wanted to make green steel."
"Using green hydrogen, we need about 400 gigawatts of renewables just to make the hydrogen for that green steel. So the point is that when we look at this overall supply chain of renewables, renewables splitting water into hydrogen, hydrogen, and replacing coal and the blast furnace, you are looking at hundreds of billions of dollars of investment. However, today, the prices are high. So we have to bring down the prices first to under $2 a kg and then under $1 a kg.
However, calculations at CEEW show that even lending 15 percent of green hydrogen into the natural gas mix separate does not actually increase prices that much. So one can start introducing green hydrogen into your fuel supply chain earlier than waiting for the prices to entirely fall below that $1-$2 per kg mark, which actually gets you onto the green hydrogen pathway much sooner said Ghosh.
He further added that the other thing that needs to happen is significant investment in alternative materials. The electrolyzers where Ambani also wants to invest his significant amount of money into, is a major component of the cost of producing green hydrogen.
The membranes used in those electrolyzers, the intellectual property sits primarily with DuPont.
"Now can we find alternative materials to build these alternative membranes that then bring down not just the cost of manufacturing green hydrogen but also diversifies our sources of the critical minerals that go into these technologies?"
“So I would simply argue that while energy independence is a desirable objective, we should remember that no country in the world has ever become completely energy independent. We have to understand the supply chains of energy from right from the upstream critical minerals and the mining all the way to the downstream applications in industry or in households."
"Once we plug ourselves into a green hydrogen supply chain, we can certainly become a hub of green hydrogen manufacturing, export and consumption,” said Ghosh.
So what exactly is the ancillary technology, which is required to ensure more consumption or setting up of these green hydrogen plants and what contribution do you see coming in from Reliance’s Jamnagar plant itself?
Ghosh said, “The announcement by Reliance is a game-changer because it shakes up the industry. It draws attention to the fact that clean energy is no longer a marginal story in India's growth story."
However, not Reliance, Adani is also investing in green hydrogen, Acme is investing in more green ammonia plants.
"So we now have a series of Indian companies looking at this opportunity, building on the platform that we built on renewable energy for the past decade, and say -- what's the next frontier?"
However, investments are needed for the renewable energy cost reduction, electrolyzer cost reduction, optimising the use of pipelines, said Ghosh.
“Today, our natural gas pipeline infrastructure of about 17,000 kilometres will be upgraded by another 15,000 kms. Now you can't pump hydrogen into those pipelines. However, reinforced natural gas pipelines can serve both for transportation of natural gas, but also in the future of hydrogen. So, can we extend the lifeline of the investment the Rs 1,000s crores of investment that goes into these pipelines and increase the lifeline of these by using more reinforced material so that they are future-ready for hydrogen?”
He further explained that finally comes the end-user side, there's no point investing upstream in the technology. If the end-user applications are not there. The International Energy Agency estimates that hydrogen demand will grow from nearly 90 million tonnes today to nearly 530 million tonnes by 2050.
India can capitalise on this by making sure that the steel industry, fertiliser industry, petrochemicals industry start drawing on hydrogen as a substitute fuel compared to fossil fuels so that's the entire supply chain, which then brings in not just the component developers, not just the R&D players, but a range of other enterprises that can come in, in the ancillary markets, as well as in the supply chain, added Ghosh.
For the entire discussion, watch video
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.