To meet its climate targets, the government, during the celebrations marking 75 years of independence, announced the National Hydrogen Mission (NHM). According to a draft paper prepared by the Ministry of New and Renewable Energy (MNRE), INR8 billion (USD108.5 million) has been allocated to the first phase from 2021 to 2024 to further explore cost-efficient ways of producing hydrogen. The draft document is currently the subject of inter-ministerial consultation.
Measures have been announced by the Ministry of Power (MoP) to explore the further uses of green hydrogen. The MoP will invite bids for 4,000 MW of electrolyser capacity. Other measures such as the provision of viability gap funding, production linked incentives and the imposition of green hydrogen consumption obligations, on the lines of renewable purchase obligations, will help to reduce the reliance on fossil fuels.
The idea of hydrogen fuel cells has been around for some time, but hydrogen production has been reliant on the use of fossil fuels. Hydrogen production is categorised by colours, indicating the amount of carbon emissions released as a by-product. Grey or blue hydrogen release carbon emissions. Green signifies the extraction of hydrogen by the process of electrolysis, wherein water is separated into oxygen and hydrogen with no emissions except water.
The latest entrant in the clean energy sector, hydrogen stands out for its efficacy. A hydrogen fuel cell powered vehicle has higher energy density, i.e., it creates hundreds of times more energy per kilogram, which gives the vehicle a much longer range to run without it needing to refuel/recharge. On the other hand, for a battery-operated vehicle the battery size needs to be increased, which in turn leads to the added weight of the vehicle. The market has so far shown scant interest in EVs owing to such factors as the lack of charging infrastructure and exorbitant costs. In this context, green hydrogen adds a new dimension.
Hydrogen fuel cells have an advantage over lithium-ion (li-ion) batteries as green hydrogen can be generated entirely within India. Sourcing of li-ion cells remains a problem as China maintains control over large reserves of lithium and cobalt used in li-ion batteries. Domestic generation of green hydrogen also brings down the cost of EVs as reliance on the import of minerals or cells from other jurisdictions reduces. EVs powered by green hydrogen fuel cells will address not only the concerns around the lack of charging points but will also reduce their manufacturing costs. Green hydrogen, in addition to its other advantages, will likely boost the domestic automotive industry.
The generation of green hydrogen using renewable sources of energy, undertaken domestically, will allow the energy sector to transform from an energy deficit market to a hub for energy exports. Owing to its geographical location, generous proportions of sunshine and wind power, clubbed with the lower tariffs for renewable sources of energy, Indian markets have the potential to play a frontline role in the green hydrogen revolution.
Domestically, focusing on green opportunities is also expected to turn around the domestic market. Besides transforming the transportation and energy sectors, hydrogen has a range of usages in sectors such as steel and chemical production, and aviation and shipping. Industry operators, including state-run entities like the National Thermal Power Corporation and the Indian Oil Corporation, and private players like Adani and Reliance, have already expressed interest in the NHM.
In order to make the NHM a success, legal, regulatory and policy regimes may have to be customised. Schemes like FAME-II, the flagship programme for electromobility, may need to be amended. Policy makers will have to lay down standards for electrolysis processes and electrolysers and promulgate certification programmes to ensure the quality of hydrogen produced.
India is currently the third-largest emitter of carbon. However, in the recent past, the government has made its resolve clear by changing its policy frameworks in order to meet its climate change prevention targets. By pitching climate security as national security, the prime minister has reaffirmed the government’s commitment to the green India initiative. More clarity on NHM will emerge as the MNRE releases the final documents. The government has indicated its intent; we shall have to see if the intent is matched by action.
Abhishek Nath Tripathi is the managing partner and Anura Gupta is a principal associate at Sarthak Advocates & Solicitors