Role of Green Hydrogen in India's Clean Energy Transition

What is Green Hydrogen?

Green hydrogen is a clean fuel created through the process of water electrolysis, utilizing electricity generated from renewable sources such as solar and wind energy. Unlike grey hydrogen, produced from fossil fuels like natural gas or coal, green hydrogen is free from direct carbon emissions, making it a critical component of a low-carbon economy.

Why is Green Hydrogen Important?

Green hydrogen plays a crucial role in several areas:

• Decarbonisation: It supports the reduction of carbon emissions in heavy industries such as steel, cement, refining, and fertilizers.
• Energy Storage: Green hydrogen can be stored and utilized as fuel for vehicles and for power generation.
• Energy Security: It enhances energy security by lowering reliance on imported fuels.
• Climate Goals: Green hydrogen contributes to fulfilling India's climate commitments and net-zero targets.

How is Green Hydrogen Produced?

The production of green hydrogen involves the following steps:

• Generating electricity using renewable energy sources like solar or wind power.
• Using electrolysers to split water (H₂O) into hydrogen (H₂) and oxygen (O₂).
• Storing and transporting hydrogen for various applications.

What is the SIGHT Scheme?

The Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme is a pivotal initiative by the Indian government aimed at boosting the green hydrogen sector. This scheme is part of the National Green Hydrogen Mission and has several key features:

• Funding: An allocation of ₹17,490 crore is set for the scheme until FY30.
• Components:
  • Component 1: Support for domestic electrolyser manufacturing.
  • Component 2: Financial incentives for green hydrogen production.
• Goal: To achieve a production capacity of 5 million tonnes of green hydrogen annually by 2030.

The SIGHT scheme aims to encourage the manufacturing of electrolysers in India, provide direct financial support to green hydrogen producers, and promote research and development to enhance technology and reduce costs.

What Challenges Does Green Hydrogen Face?

Despite its potential, green hydrogen production encounters several challenges:

• High Production Costs: Currently, green hydrogen is priced at ₹300 per kg, making it twice as expensive as grey hydrogen.
• Price Gap: Existing incentives under SIGHT are insufficient to close the cost difference.
• Power Costs: The cost of electricity remains a significant factor in hydrogen production, necessitating reduction strategies.
• Operational Costs: Establishing a green hydrogen plant requires substantial investments, ranging from ₹10 crore to ₹15 crore.
• Market Uncertainty: The absence of a clear pricing benchmark for green hydrogen creates market challenges.
• Demand Clarity: The demand for green ammonia is still uncertain, despite growing interest.

Government Initiatives to Address Challenges

The government is taking several steps through the SIGHT scheme to tackle these challenges:

• Incentives for Electrolysers: Supporting the domestic production of electrolysers to lower costs and enhance supply chains.
• Financial Support: Providing financial incentives for companies involved in green hydrogen production to enhance viability.
• Grid Integration: Focusing on ensuring reliable and low-cost renewable energy for hydrogen production.
• Industry Collaboration: Engaging with major energy and industrial companies to establish pilot projects and scale production.

Upcoming Green Hydrogen Projects in India

Several major projects are underway in India:

• IOC, Bharat Petroleum, and Reliance Industries are conducting green hydrogen pilot projects.
• NTPC is blending green hydrogen with PNG in its pilot initiative.
• Honeywell is planning to establish India’s first green ammonia plant.
• Indian Oil is developing a 10,000-tonne-per-year green hydrogen facility at its Panipat refinery.

What is the Way Forward?

Looking ahead, several strategies can enhance the green hydrogen sector:

• Increasing incentives under the SIGHT scheme to boost competitiveness.
• Expanding renewable energy capacity to lower electricity costs for hydrogen production.
• Encouraging domestic innovation in electrolyser technology and hydrogen storage solutions.
• Building partnerships with industries to create viable use cases and markets for green hydrogen.
• Establishing a transparent pricing mechanism to increase investor confidence.

Frequently Asked Questions (FAQs)

Q1. What is green hydrogen?
Answer: Green hydrogen is a clean fuel produced through electrolysis using renewable energy, with no direct carbon emissions, essential for a low-carbon economy.

Q2. Why is the SIGHT scheme important?
Answer: The SIGHT scheme supports green hydrogen production in India, providing funding and incentives to boost domestic manufacturing and achieve climate goals.

Q3. What are the main challenges in green hydrogen production?
Answer: Challenges include high production costs, insufficient financial incentives, and market uncertainties regarding demand and pricing benchmarks.

Q4. How does the government plan to promote green hydrogen?
Answer: The government aims to support electrolyser manufacturing, provide financial incentives, and promote collaborations with industries to enhance production.