A Green Hydrogen Economy for India
India has committed to reducing the emission intensity of economic activity by 33–35% by 2030 (below the 2005 levels) under the Paris Agreement on climate change. To achieve this goal, the Government of India has drafted policies to reduce emissions from the power, industry, and transport sectors, which contribute a lion’s share of emissions to the economy.
The targeted measures include an ambitious 450 GW of electric power generation through renewable energy sources by 2030, Perform, Achieve, and Trade (PAT) scheme for enhancing industrial energy efficiency, and increasing the share of electric vehicles (EVs) in both public and private transport. However, Greenhouse Gas (GHG) emissions from the sector are still coupled with economic growth as fossil fuels cater to the majority of the energy demand.
The World Energy Outlook 2018 estimated that India’s industrial and transport emissions, as a share of its total energy emissions, will rise from 37% in 2017 to 50% in 2040 (International Energy Agency [IEA]).
Globally, green hydrogen, a source of clean energy and industrial feedstock, is now becoming the key focus of international climate agenda as the cumulative of all the Nationally Determined Contributions (NDC) fall way short of the required reductions in global GHG emissions needed to limit global warming below 2°C by the end of the century.
The European Union (EU), Australia, and Japan have already announced their hydrogen roadmap and many countries are expected to draw up a hydrogen programme in the future. India is likely to witness a huge surge in energy demand in a post-pandemic world to realise rapid economic growth. To cater to the present energy demand, India imports petroleum and industrial-grade coal. The dependence on fuel import and vagaries of commodity markets could stifle growth. India is endowed with abundant renewable energy resources, but tariffs for power generated from these sources are falling. The hydrogen production technologies are fast evolving and expected to get cheaper due to a surge in global demand. For India’s energy transition to clean fuels, adoption of green hydrogen to generate energy would bring in significant benefits. The transition to a hydrogen economy will not only reduce India’s import dependency on hydrocarbon fuels but also provide clean air to its citizens and reduce GHG emissions in absolute terms.
We are of the view that India’s ambitious renewable capacity deployment targets accompanied by falling tariffs and the ever-increasing energy demand from the industry and transport sectors are ideal for making a switch to hydrogen economy. We evaluate the hydrogen production costs in different regions in India, primarily based on market forecasts and projections for various future scenarios. We identify the key conditions and technology targets that are required to support large- scale and competitive production of hydrogen in the country. We finally recommend key policy measures that the government should implement for achieving competitive production costs in the future.
(The study has been authored by Tirtha Biswas and others)