India needs to form Green Hydrogen Corridors and governments can look at providing grants to startups as well as support entrepreneurs to promote green hydrogen, NITI Aayog said on Wednesday.
In a report titled ‘Harnessing Green Hydrogen – Opportunities for Deep Decarbonisation in India’, the Aayog also suggested that there is a need to facilitate investment through demand aggregation and dollar-based bidding for green hydrogen. “Three hydrogen corridors should be developed across the country based on state grand challenges … The governments can provide grants and loans to startups and projects, support entrepreneurs through incubators and investor networks, and put in place regulations that manage first-mover risks,” the report said.
The government can also use public procurement and purchase incentives (for green hydrogen) to create demand in niche markets and crowd in private investment, it added. The report suggested that the government should promote export of green hydrogen and green hydrogen-embedded products through a global hydrogen alliance.
Green Hydrogen/ Green Ammonia is defined as hydrogen/ ammonia produced by way of electrolysis of water using renewable energy, including renewable energy which has been banked and the hydrogen/ammonia produced from biomass. Most large economies including India have committed to net zero targets. The report predicted that hydrogen demand in India could grow more than four-fold by 2050, representing almost 10 per cent of global hydrogen demand.
In the longer term, steel and heavy-duty trucking are likely to drive the majority of demand growth, accounting for almost 52 per cent of total demand by 2050, it added. Emphasising that the roadmap should also identify a timeline and scale of manufacturing support for electrolysers, the report said, “India may aim for 25 GW of electrolysers by 2030, while also investing USD 1 billion in R&D to catalyse the development of commercial green hydrogen technologies across the value chain.”
It noted that radically improving the speed of regulatory clearances coupled with preferential treatment in public tenders will help catalyse local manufacturing. The report suggested that grand challenges, public-private venture capital and financing test bench infrastructure could be part of the R&D investments. Addressing the nation on the 75th Independence Day, Prime Minister Narendra Modi had announced the National Hydrogen Mission with an aim to make India a hub for production and export of green hydrogen.
The report opined that the government can intervene on the supply side to reduce the cost of green hydrogen to USD 1/kilogram (kg). The cost of hydrogen from electrolysis today is relatively high, between around USD 7/kg and USD 4.10/kg depending on various technology choices and the associated soft costs. The report suggested that states should be encouraged to launch their own green hydrogen-based policies in order to complement efforts at the national level. It also suggested that the government should initiate green hydrogen standards and a labelling programme. The report aims to serve as a key knowledge base for India’s Green Hydrogen Policy discourse and private sector investment decisions.