Decarbonising the planet is one of the goals that countries around the world have set collectively for 2050. As a result, electrification has become crucial to help combat global warming. However, industrial processes and energy-intensive industries that require other forms of energy need an alternate solution. To achieve this, decarbonising the production of an element such as hydrogen to maximize the production of green hydrogen can help advance the transition to a low-carbon, climate-neutral world that could create benefits for all.
The debate around hydrogen energy is getting more and more attention. Something which was a niche feedstock product serving heavy industry is now very much at the forefront of decarbonising the transportation and shipping world. Hundreds of billions of dollars are being invested into projects aimed at helping achieve net-zero targets and creating zero-emission fuel. Against that backdrop, let’s take a closer look at the available options.
Types of Hydrogen
Hydrogen is the lightest chemical element with the symbol H and atomic number 1. At standard conditions, hydrogen is a gas of diatomic molecules having the formula H₂. It is colorless, odorless, tasteless, non-toxic, and highly combustible. Although the most abundant elements found on Earth, it is hard to find in its free state. As a result, it needs to be extracted from other sources such as water, coal, biomass, or natural gas using several processes and resources. The different combinations of sources and processes are usually described using various colours. Most of the hydrogen production used today utilizes high-carbon sources. However, to achieve a more sustainable future and forward the clean energy transition, the global objective is to scale down the use of other hydrogen ‘colours’ and to produce a cleaner product.
As hydrogen is an invisible gas, somewhat confusingly and despite their colorful descriptions, there is no visible difference between the different types of hydrogen. They’re essentially color codes, or nicknames, used within the energy industry to differentiate between the types of hydrogen. Depending on the type of production used, different colours are assigned to the hydrogen. But there is no universal naming convention and these color definitions may change over time, and even between countries.
Blue hydrogen is sometimes described as ‘low-carbon hydrogen’ as the steam reforming process doesn’t actually avoid the creation of greenhouse gases. It is produced mainly from natural gas, using a process called Steam Reforming, which brings together natural gas and heated water in the form of steam. The output is hydrogen – but also carbon dioxide as a by-product. That means Carbon Capture and Storage (CCS) is essential to trap and store this carbon. CCS has been around a while, with the technology being used by heavy industry and power generation companies burning fossil fuels. The technology can capture up to 90 percent of the CO2 produced, so it isn’t perfect but clearly a massive improvement. Most of the time, this CO2 is transported by a pipeline and stored deep underground, often in salt caverns or depleted oil and gas reservoirs. Countries which do not have access to such underground options will find it very challenging to establish a blue hydrogen industry. Developing green hydrogen as their primary solution may be more cost-effective.
Some forward thinking organizations like Drax in the UK have been combining CCS with biomass fuels, aiming to become carbon negative — removing more carbon dioxide from the atmosphere than it produces. When it comes to hydrogen production, blue hydrogen is often seen as a stepping stone from grey to green, and it’s proven to be divisive among industry professionals. On one hand, it is relatively easy to scale up from existing grey hydrogen production and requires less electricity. It is also not dependent on the rapid and continuous growth in renewable energy sources such as offshore wind and solar.
On the other, think tanks and green hydrogen advocates argue that blue hydrogen goes against the goals and principles of net-zero, as well as being more expensive than green in the medium term.
Currently, this is the most common form of hydrogen production. Grey hydrogen is created from natural gas, or methane, using steam methane reformation but without capturing the greenhouse gases made in the process. The process used is called Steam Methane Reforming (SMR), where high-temperature steam (700°C–1,000°C) is used to produce hydrogen from a methane source, such as natural gas. In SMR, methane reacts with steam under 3–25 bar pressure (1 bar = 14.5 pounds per square inch) in the presence of a catalyst to produce hydrogen, carbon monoxide, and a relatively small amount of carbon dioxide. Steam reforming is endothermic — that is, heat must be supplied to the process for the reaction to proceed.
There is also a gasification process which uses coal as a feedstock, creating brown hydrogen, which also releases carbon dioxide and can be put in the same category as grey. The head of business development at the renewable energy giant Enel has described hydrogen as a “climate killer” as it stands right now due to almost all of it being grey: “98 percent of it is produced from steam reforming and gasification, which equates to yearly carbon emissions comparable to that of Indonesia and the UK combined. Just 2 percent is produced from electrolysis.”Clearly, grey hydrogen is not a long-term solution.
How Blue and Gray Hydrogen Produced
The standard method for producing hydrogen is SMR. When emissions from SMR hydrogen production are allowed to enter the atmosphere, the result is gray hydrogen. This is by far the most common hydrogen type on the market today. The resulting hydrogen is called blue hydrogen if emissions are captured on-site using carbon capture and sequestration technology. Between them, blue and gray SMR processes account for around 95 percent of all hydrogen produced today.
In SMR, natural gas is made to react with steam at extremely high temperatures to produce carbon monoxide and hydrogen as follows:
CH4 + H2O ⇌ CO + 3 H2
After this reaction, the Water Gas Shift (WGS) reaction makes additional steam react with carbon monoxide to produce more hydrogen and carbon dioxide molecules as follows:
CO + H2O ⇌ CO2 + H2
These equations demonstrate the first part of hydrogen’s carbon footprint problem: all of the carbon in the methane (CH4) that enters the plant is eventually converted into carbon dioxide (CO2). Four molecules of hydrogen (H2) are produced for each carbon dioxide molecule, with the steam added in the second step providing the extra hydrogen molecules.
Essentially, this is why gray hydrogen has such a large carbon footprint. However, blue and gray hydrogen also create greenhouse gas emissions in the second part of the problem. This is because each process requires large amounts of energy, generating steam, heating the reactor, cooling material, etc. There are 280g of carbon dioxide emissions for every kilowatt-hour of hydrogen energy produced for gray carbon.
This equation only takes hydrogen production into account. Once hydrogen is produced, it still has to be compressed, transported, combusted, or converted into a fuel cell to be a valuable energy source. Fuel cells also need to be manufactured, further adding to the hydrogen’s potential carbon footprint.
Black and Brown Hydrogen
Using black coal or lignite (brown coal) in the hydrogen-making process, the black and brown hydrogen are the absolute opposite of green hydrogen in the hydrogen spectrum and the most environmentally damaging. Just to confuse things, any hydrogen made from fossil fuels through the process of ‘gasification’ is sometimes called black or brown hydrogen interchangeably.
Japan and Australia announced a new brown coal-to-hydrogen project recently. This project will use brown coal in Australia to produce liquefied hydrogen, which will then be shipped to Japan for low-emission use.
Pink hydrogen is generated through electrolysis powered by nuclear energy. Nuclear-produced hydrogen can also be referred to as purple hydrogen or red hydrogen. In addition, the very high temperatures from nuclear reactors could be used in other hydrogen productions by producing steam for more efficient electrolysis or fossil gas-based steam methane reforming.
This is a new entry in the hydrogen color charts and production has yet to be proven at scale. Turquoise hydrogen is made using a process called methane pyrolysis to produce hydrogen and solid carbon. In the future, turquoise hydrogen may be valued as low-emission hydrogen, dependent on the thermal process being powered with renewable energy and the carbon being permanently stored or used.
Yellow hydrogen is a relatively new phrase for hydrogen made through electrolysis using solar power.
White hydrogen is naturally-occurring geological hydrogen found in underground deposits and created through fracking. There are no strategies to exploit this hydrogen at present.
The utopian vision of the future is a net-zero world where all our electricity and fuel is produced by emission-free sources. It means a fully-scaled green hydrogen industry on a global scale. It has the potential to be a major part in solving the intermittent generating capacity of most renewable energy sources. Excess electricity can be used to create hydrogen, which is then stored as a gas or liquid until needed. In the kaleidoscope of hydrogen colours, green hydrogen is the one produced with no harmful greenhouse gas emissions. Green hydrogen is made by using clean electricity from surplus renewable energy sources, such as solar or wind power, to electrolyze water. Electrolysers use an electrochemical reaction to split water into its components of hydrogen and oxygen, emitting zero-carbon dioxide in the process.
It faces many challenges, but the momentum behind it is growing with governments around the world recognizing the potential benefits and developing policies to help drive development and adoption. Rather than using fossil fuels, green hydrogen is made by using a process called electrolysis to split water into hydrogen and oxygen. If that process is powered by a renewable energy source, such as wind or solar power, then the hydrogen is referred to as being green.
How Green Hydrogen Produced
Green hydrogen is produced by the electrolysis of water powered by renewable energy sources such as solar or wind power. Electrolysis is the process of using electricity to split water into hydrogen and oxygen. This reaction takes place in a unit named an electrolyser. As renewable energy sources are used to conduct the electrolysis, no CO2 is emitted into the atmosphere, making green hydrogen the cleanest option for energy.
It is also a clean fuel alternative as the by-product of oxygen from the electrolysis method can be efficiently vented back into the atmosphere without consequence. The global adoption of this technique used to obtain green hydrogen could radically reduce the amount of CO2 emissions that are produced through fossil fuel consumption.
Benefits of Green Hydrogen
There are multiple advantages of green hydrogen, one being its sustainability, as it does not emit polluting gases in either its production or combustion. This fuel alternative can also reduce carbon footprints as it does not release greenhouse gases.
Green hydrogen is also very versatile as it can be transformed into either a synthetic gas or electricity. It can be utilized for commercial, domestic, mobility, or industrial purposes. It is also easily storable as hydrogen is very lightweight.
Hydrogen fuel cell technology produces a high-density energy source that is energy efficient. Its fuel efficiency enables a higher energy production per pound of fuel than alternative energy sources.
Transition to Producing Cleaner Hydrogen Supplies
According to the IEA report Global Hydrogen Review 2021 that in 2020, hydrogen demand stood at 90 MT and was almost exclusively produced from fossil fuels. This resulted in an estimate of 900 MT of CO2 emissions. However, due to the increased global capacity of electrolysers in 2021, which are required to produce green hydrogen using electricity, the report estimated that the global hydrogen supply using electrolysers could potentially reach more than 8 MT by 2030.
While this is a positive transition to increase green hydrogen production, this estimate remains significantly lower than the 80 MT required in the target for net zero CO2 emissions by 2050, as commissioned by the IEA Roadmap for the Global Energy Sector. Europe is currently leading electrolyser capacity deployment, with 40 percent of global installed capacity, and is set to remain the largest market due to the ambitious hydrogen strategies of the European Union and the United Kingdom.
- Technology – Green hydrogen needs electrolysers to be built on a scale larger than we’ve yet seen.
- Transportation and Storage – Either very high pressures or very high temperatures are required, both with their own technical difficulties.
- Cost – To become competitive, the price per kilogram of green hydrogen has to reduce to a benchmark of $2/kg, with Bloomberg New Energy Finance reporting that $1/kg is achievable by 2050. At these prices, green hydrogen can compete with natural gas. Costs for producing green hydrogen have fallen 50 percent since 2015 and could be reduced by an additional 30 percent by 2025 due to the benefits of increased scale and more standardized manufacturing, among other factors.
- Electricity – Creating green hydrogenneeds a huge amount of electricity, which means a mind-blowing increase in the amount of wind and solar power to meet global targets.
Some current estimates are that that we need to install more offshore wind capacity than in the previous two decades, every year for the next 30 years. These are all major challenges, but a lot of them are already being overcome by incredible engineers and scientists. With the right backing, we can be confident that green hydrogen will prove itself to be the amazing energy solution we need. Currently, it makes up a small percentage of the overall hydrogen, because of high production cost. Just as energy from wind power has reduced in price, green hydrogen will come down in price as it becomes more common.
The latest buzzword in the world of global energy aspirations sounds like the title of a blockbuster Sci-Fi movie — Green H2 -1-1-1 ($1 for 1 kg of green hydrogen in 1 decade). The buzzword may be new but the science behind it was dreamt up way back in the 19th century. “Water will one day be employed as fuel, that hydrogen and oxygen which constitute it, used singly or together, will furnish an inexhaustible source of heat and light, of an intensity of which coal is not capable,” Jules Verne wrote in his 1875 novel, The Mysterious Island.
Climate change is accelerating and intensifying faster than anticipated, with pollution reaching high levels. The health and well-being of present and future generations, along with their economic development, are at risk. To maintain a cleaner and greener environment urgently require appropriate solutions. Hydrogen has shown a ray of hope against climate change as one of the cleanest fuels with zero carbon emissions. It’s used in energy applications with the right fuel cells. Due to the availability of cheaper renewable energy, India is in a unique position to produce hydrogen for its own needs as well as a global export hub.
India has emerged as a global leader in climate change. As the world’s third-biggest emitter, it is now making visible efforts to reduce global warming and remains committed to substantially reducing its carbon footprint in the future. The PHD Chamber of Commerce and Industry (PHDCCI) with “Swachh Bharat – Neela Akash” acts as a catalyst in spreading awareness and technological innovations concerning pollution prevention and control including climate mitigation, etc. It has also been working for industrial transformation and advanced multi-stakeholders initiatives to promote sustainability, resilience, and performance into a variety of socio-economic systems.
The ball was set rolling by Prime Minister Narendra Modi when he unveiled the 25-year roadmap for Hydrogen Development in his address on India’s 75th Independence Day and announced the National Hydrogen Mission to meet the larger goal of self-reliance in energy production by the 100th Independence Day in 2047. “The thing that is going to help India with a quantum leap in terms of climate is green hydrogen. We have to make India a global hub for green hydrogen production and export,” he said. In order to meet these goals, Union Budget 2021 earmarked Rs.800 crore for pilot projects, infrastructure, research and development, regulations and public outreach. The Ministry of New and Renewable Energy (MNRE) is also working on a policy document for the national hydrogen energy mission. According to the revised Green Hydrogen / Green Ammonia policy notified on February 17, 2022:
- i.Green Hydrogen / Ammonia manufacturers may purchase renewable power from the power exchange or set up renewable energy capacity themselves or through any other, developer, anywhere.
- ii.Open access will be granted within 15 days of receipt of application.
- iii.The Green Hydrogen / Ammonia manufacturer can bank his unconsumed renewable power, up to 30 days, with distribution company and take it back when required.
- iv.Distribution licensees can also procure and supply Renewable Energy to the manufacturers of Green Hydrogen / Green Ammonia in their States at concessional prices which will only include the cost of procurement, wheeling charges and a small margin as determined by the State Commission.
- v.Waiver of inter-state transmission charges for a period of 25 years will be allowed to the manufacturers of Green Hydrogen and Green Ammonia for the projects commissioned before 30th June 2025.
- vi.The manufacturers of Green Hydrogen / Ammonia and the renewable energy plant shall be given connectivity to the grid on priority basis to avoid any procedural delays.
- vii.The benefit of Renewable Purchase Obligation (RPO) will be granted incentive to the hydrogen/Ammonia manufacturer and the Distribution licensee for consumption of renewable power.
- viii.To ensure ease of doing business a single portal for carrying out all the activities including statutory clearances in a time bound manner will be set up by MNRE.
- ix.Connectivity, at the generation end and the Green Hydrogen / Green Ammonia manufacturing end, to the ISTS for Renewable Energy capacity set up for the purpose of manufacturing Green Hydrogen / Green Ammonia shall be granted on priority.
- x.Manufacturers of Green Hydrogen / Green Ammonia shall be allowed to set up bunkers near Ports for storage of Green Ammonia for export / use by shipping. The land for the storage for this purpose shall be provided by the respective Port Authorities at applicable charges.
The implementation of this Policy will provide clean fuel to the common people of the country. This will reduce dependence on fossil fuel and also reduce crude oil imports. The objective also is for our country to emerge as an export Hub for Green Hydrogen and Green Ammonia. The policy promotes Renewable Energy (RE) generation as RE will be the basic ingredient in making green hydrogen. This in turn will help in meeting the international commitments for clean energy.
The announcement of the National Hydrogen Energy Mission in the Union Budget of India 2021-22 is an indication of India’s potential in building capacity to become the cheapest hydrogen producer in the world by 2050. Some years ago, government had launched a similar mission for solar power under which India is chasing 500 gigawatt (GW) capacity by 2030 and has achieved much success —100 GW, from less than 30 GW six years ago. Will hydrogen see a similar takeoff? It will, but with time. “Hydrogen will drive economies not now but in near future. Today’s electrolysers (used to separate hydrogen from water using cathode, anode and membrane) consume 40-50 units of electricity to split water and generate 30-35 units. Energy consumed is more than energy produced.
India is in the process of setting up its own manufacturing capacity for making hydrogen electrolysers. These are devices that use renewable electricity to split water into hydrogen and oxygen. They are in limited supply globally. Government is going to come out with production incentives for the manufacturing of electrolysers. India’s needs a huge amount of electrolysers- at least 50 gigawatt (GW) or more to ramp up hydrogen production. The global electrolyser capacity was at 0.3 GW in 2020, produced mostly through grid electricity, according to a 2021 report by the International Energy Agency (IEA). Global electrolyser capacity could reach 17 GW by 2026 based on planned projects in nearly 30 countries, the IEA report added.
India is also setting up bunkers at all our ports and has signed up with ministry of ports for giving space to store ammonia and hydrogen for the shipping industry to use. Private players with the technology in India and abroad should initiate competitive bidding processes for the manufacture of green hydrogen. Hydrogen would mostly be consumed domestically in India itself, as the demand was high. India was an economy decarbonising at a fast pace, with demand outstripping supply, particularly for electronic vehicles in the two- or three-wheelers category.
India is the most attractive market for investment for renewable energy in the world. Being the growing economy, renewable demand is increasing giving space to add more renewable. The ministry was considering experimenting with hydrogen in the cement and steel industries too. This was to decarbonize these sectors that use grey hydrogen as an important raw material produced from coal. But this was very much in its nascent stages. Steel giant ArcelorMittal was setting up one such facility. An obligatory purchase clause in the fertilizers and refinery sectors, where the use of hydrogen is well-established be added.
For energy-starved India, which is aiming for carbon neutrality by 2070, the path to energy security goes through a mix of oil, coal, blended fuels, natural gas, renewable and electricity. At present India’s $3.12 trillion economy needs 1,650 billion units (BU) of power, made from nearly 400 GW of capacity. Of this, green electricity is only 17 percent. When the economy touches $5-7 trillion in the next decade, it will need at least 3,000-4,000 GW. Further, at current rate, the energy import bill will triple by 2040. The only way out of these massive challenges is tapping as many green and locally available energy sources as possible.
New Delhi-based climate and energy research firm, Council for Energy, Environment and Water Research (CEEWR) has estimated that net zero emissions by 2070 will require 5,630 GW solar capacity, 99 percent reduction in coal use between 2040 and 2060 and 90 percent fall in crude oil consumption between 2050 and 2070. By that time, green hydrogen should meet 19 percent of industry’s needs. According to CEEWR’s Centre for Energy Finance, India requires $10 trillion (Rs.750 lakh crore) energy investments, including $8.4 trillion for augmenting renewable capabilities. Another $1.5 trillion will be required for creating a green hydrogen ecosystem in the industrial sector.
The Energy and Resources Institute (TERI) estimated 23 MT hydrogen demand by 2050. India’s current output is 6.7 MT, produced mostly from natural gas through steam-methane reforming process (methane reacts with steam under pressure in presence of a catalyst to produce hydrogen, carbon monoxide and a small amount of carbon dioxide). The biggest consumers of this hydrogen are refineries, chemical companies and fertilizer plants.
However, the game changer will be green hydrogen, as other ways of generating this new-age fuel are not cent per cent carbon neutral. “Green hydrogen accounts for just 0.1 percent global hydrogen production. However, declining cost of renewable electricity (70 percent cost of producing hydrogen) and electrolysis technology indicates it could be the next best investment in the world of clean energy,” according to Gupta, chairman, Expert Appraisal Committee (Industry-II), Ministry of Environment, Forest & Climate Change.
Pashupathy Gopalan, an investor in Ohmium, India’s first integrated green hydrogen electrolyser gigafactory in Bangalore, says production of 20 MT green hydrogen (at $1 per kg) will be a $20-25 billion opportunity. India can produce green hydrogen from 15-20 GW installed capacity by 2030. For that, it will need to invest $4-5 billion in electrolysers, according to the India Hydrogen Alliance (IH2A), a grouping of industry stakeholders.
Inclusion of hydrogen as an energy carrier in future energy portfolio presents a unique opportunity to address emerging energy vectors, including power to gas, power to power, power to mobility and even vehicle to grid applications. India is working on a pilot on blue hydrogen, hydrogen CNG and green hydrogen and blending hydrogen with compressed natural gas for use as transportation fuel and industrial input in refineries. The government is planning to blend 15 percent green hydrogen with piped natural gas for domestic, commercial and industrial consumption.
Fuelling the Next Generation
Green Hydrogen is considered to be one of the cleanest fuels for both transport and power generation. The cost reduction in hydrogen production, storage, transmission, distribution, and application has become an important area of global shift for regulators, investors, and consumers. Today, hydrogen is considered a zero-carbon solution for several applications including long trucking, shipping, and steel industry. Refining is expected to switch to green hydrogen over the next decade. For fertilizer production, green ammonia will become cost-effective by 2030. India’s steel mills (the second-largest producers globally), expect hydrogen-based products to be the key to reducing pollution. At a projected estimate of 837 million tons, emissions from India’s steel industry will more than triple in the next three decades, as demand for the alloy more than quadruples.
For A Cleaner Greener Future
Hydrogen production is energy-intensive, and there is a need to exploit non-greenhouse gas producing sources like wind & solar to generate electricity for the purpose. While reducing the burden on fossils fuels, large-scale use of hydrogen energy – a cent per cent clean fuel – will also reduce greenhouse gas emissions. Investments in R&D, technology up-gradation, and capacity building are the key to a cleaner future. With abundant natural resources, favorable climatic and geographical conditions, India has an advantage that needs to be harnessed. Hydrogen’s potential as a clean fuel, energy storage medium, and enabler of renewable energy has caught the interest of governments, energy sector players, environmental advocacy groups, and users. India is one of the best-suited countries for producing renewable energy from solar and wind, making renewable hydrogen production cost-effective.
The Future of Hydrogen as Energy
Projects looking into the possibilities of using hydrogen as an energy source are currently underway in various parts of the world. “To meet net zero in a timely, fair and just way we will need to explore a range of solutions. Scaling up and selecting from the clean hydrogen palette has the potential to support decarbonization of homes, transport, industry and power. In the future, some hydrogen colours may fade in importance and others burn brighter. What’s certain is that the hydrogen rainbow will play a significant role in reaching net zero, as we reduce our historical reliance on fossil fuels and look to green alternatives to power our homes, businesses and transport. Hydrogen is only a part of the energy mix that also included solar, wind and nuclear power. One should not thought that hydrogen is going to be a one-stop solution.
Corporate India has got the drift and is working overtime to tap the opportunity at hand. Mukesh Ambani, chairman, Reliance Industries Ltd (RIL), is anticipating a New Green Revolution. “India can set an even more aggressive target of achieving under $1 per kg within a decade. This will make India the first country to achieve $1 per 1 kg in one decade – the 1-1-1 target for green hydrogen,” he said at the International Climate Summit 2021.
RIL has kicked off its green initiatives with a slew of deals in recent months and plans for setting up four giga factories in Jamnagar at an investment of Rs.60,000 crore for making solar photovoltaic modules, advanced energy storage batteries, electrolysers and fuel cells. RIL’s new renewable subsidiary, Reliance New Energy Solar, has partnered with Danish climate change technology company Stiesdal A/S to develop and manufacture hydrogen electrolysers at one of these four factories. It has also invested $50 million in US-based energy storage company Ambri, besides acquiring Norwegian solar equipment maker REC Solar Holdings AS and a 40 percent stake in renewable project specialist Sterling & Wilson Solar. Bernstein Research analysts estimate that RIL is building a clean energy business worth $36 billion but say it will have to master more fuel cell technologies to tap opportunities in hydrogen. “It is too early to comment as we are working out the detailed plans,” says an RIL spokesperson.
Gautam Adani plans to build the world’s largest renewable energy company with 45 GW capacity by 2030. He is also aiming to become the largest hydrogen producer in the world. The group plans to spend 80 percent capital expenditure in green businesses, including $20 billion in renewables, green component manufacturing and enabling infrastructure, over the next decade. The group’s large capabilities in energy (both fossil and renewable), transmission & distribution infrastructure and logistics can make it a big green hydrogen player.
India’s oil marketing companies (OMCs) are also in the game. The leader, Indian Oil Corporation (IOC), is working on plans to convert a part of the grey hydrogen it produces to blue hydrogen. “ Mathura refinery will be turned into a green hydrogen-powered refinery,” according to S.M. Vaidya, chairman and managing director, IOC. The company has floated an expression of interest (EoI) for setting up green hydrogen plants in Mathura and Panipat refineries. Mathura is envisaged as the largest plant in India with 40 Mega Watt Hour (MWH) capacity. The plant in Panipat will have a capacity of 15 MWH. The company has also tied up with L&T and ReNew to set up hydrogen plants. “We also intend to run blue hydrogen buses from Gujarat refinery to Statue of Unity,” says Vaidya. IOC has asked Tata Motors to build 15 hydrogen-based fuel cell buses for the purpose.
Other state-run fuel companies are not far behind. Bharat Petroleum Corporation Ltd. (BPCL) will soon float a tender for a 20 MW electrolyser at its Bina refinery in Madhya Pradesh for building India’s largest green hydrogen plant. “We will scale up after seeing the results. We are also exploring use of green hydrogen as a transportation fuel. Indian refineries are the first in the world to adopt green hydrogen,” says Arun Kumar Singh, CMD, BPCL. Hindustan Petroleum Corporation (HPCL), is setting up a 370 MT green hydrogen plant at Vizag refinery. “It is just to get a hang of it. We had set up a green hydrogen plant a year ago to run our R&D centre. We are also researching on next-generation battery technologies,” says M.K. Surana, CMD of HPCL.
While GAIL (India) will build one of India’s largest proton exchange membrane (PEM) electrolyser at Guna in Madhya Pradesh to produce green hydrogen by the end of 2023, India’s largest integrated power generator, NTPC Ltd, has floated an EoI for a pilot on blending hydrogen with natural gas in city gas distribution networks. Its renewable energy subsidiary, NTPC REL, is setting up a green hydrogen fuelling station at Leh where it plans to begin with five fuel cell vehicles. The station will be powered by a 1.25 MW solar plant at Leh.
Even solar power players are looking at the opportunity. On December 2, renewable energy company ReNew Power and engineering conglomerate Larsen & Toubro (L&T) entered into a memorandum of understanding to develop, own, execute and operate green hydrogen projects. “This will allow both to pool knowledge, expertise and resources to take advantage of this transition,” says ReNew chairman & CEO Sumant Sinha. “We are already looking at some interesting opportunities in the Indian market for green hydrogen by developing end-to-end competitive solutions for the industry. ReNew brings its renewable energy development expertise to the table which, combined with our expertise in EPC, will contribute to sustainable and eco-friendly profitable growth,” says Subramanian Sarma, whole-time director & senior executive vice president (energy), L&T. The infrastructure major has also signed an MoU with Norway’s HydrogenPro to set up a joint venture in India for gigawatt-scale manufacturing of alkaline water electrolysers.
Seshagiri Rao says JSW Energy and JSW Steel’s R&D teams are also working on cutting-edge hydrogen technologies. JSW Future Energy is working with Australian Fortescue Future Industries for production of green hydrogen and utilizing it for mobility, making green steel, green ammonia, and other industrial applications.
Even the railways are interested. The Indian Railways Organization for Alternate Fuels has invited bids to develop a hydrogen fuel cell-based hybrid power train for retrofitting the 700 HP diesel-hydraulic locomotives running on the Kalka-Shimla narrow gauge section.
The initiatives have piqued the interest of global technology providers too. Hyderabad-based cleantech firm Greenco teamed up with Belgian alkaline electrolyser maker John Cockerill to make electrolysers in India. Before that, Ohmium International had shipped its first proton exchange membrane electrolysers to the US. “We are a 100 percent Indian company. Our factory now has a capacity to produce about 500 MW of electrolysis equipment per annum. This is eventually planned to be expanded to two GW per annum,” says Pashupathy Gopalan.
Once these companies manage to develop their capabilities, it’s clear that green hydrogen will change the country’s energy consumption patterns, especially in industries where hydrogen is a key input even today.
Refining & Industry
Global hydrogen demand was 90 MT in 2020. More than 70 MT was used as pure hydrogen. The rest was mixed with gases containing carbon. Almost all of this demand came from oil refining and industrial sectors, mainly for production of ammonia and methane. Hydrogen produced from fossil fuels for these applications results in close to 900 MT CO2 emissions per year, according to IEA data.
Oil refiners are largest consumers (40 MT). The gas they use is usually produced onsite by either steam methane reforming, separated from by-product gases through petrochemical processes or sourced externally as merchant hydrogen. Since use of low-carbon hydrogen in refining is not economically viable yet, refiners are trying to move to carbon capture, utilization and storage (CCUS) technologies to lower carbon footprint. In this process, carbon monoxide and carbon dioxide formed during the ‘coal to hydrogen’ process are trapped and stored in an environmentally sustainable manner. Estimates say use of low-carbon hydrogen in refining rose from 250 KT in 2019 to more than 300 KT in 2020, and based on the current pipeline of projects, 1.2-1.4 MT low-carbon hydrogen is likely to be used in refining by 2030.
Industry demand for hydrogen was 51 MT in 2020, with chemical production consuming 46 MT, mainly to make ammonia and methanol, while the remaining five MT was consumed mainly for making steel. Only 0.03 percent hydrogen used in industry has low carbon content.
New CCUS-equipped projects can supply only one-three MT electrolytic projects for low-carbon hydrogen demand by 2030. In order to meet net zero emission goals by 2050, the industrial sector has to use at least 21 MT low-carbon hydrogen. Similarly, total hydrogen demand in traditional applications (ammonia and methanol production) will reach 54 MT by 2030, and to meet sustainability goals, at least nine MT has to come from low carbon hydrogen technologies. However, projects in the pipeline will be able to supply only up to 3.1 MT low-carbon hydrogen by 2030.
The steel industry, which accounts for 0.7 percent of the world’s economic output but contributes 7 percent to global emissions, is facing its unique set of challenges. In iron and steel production, hydrogen demand is expected to triple to 18 MT by 2030, but commercial scale 100 percent hydrogen-based direct reduced iron (DRI) technologies are still at an experimental stage (iron reduction through hydrogen needs a lot of heat; DRI plants can generate such heat due to presence of carbon monoxide in synthesis gas being produced from the coal gasification process).
Tata Steel is among the few steel makers attempting to master technology to make steel from green hydrogen. The project is being implemented at its Netherlands facility. A Roland Berger study says Tata Steel’s aim of making green steel before 2030 is possible provided it gets policy support. Hans Dan Ven Berg, chairman of Tata Steel Netherlands, says the company has already started implementing technologies for making green steel. “Our preference would be to start using hydrogen immediately. We are doing a lot of preparatory work,” he said in a recent announcement.
“We are watching how hydrogen technologies are evolving. Once possible, we can retrofit existing equipment with hydrogen injection instead of coal injection into blast furnaces to make green steel,” says JSW’s Seshagiri Rao. JSW Steel is already trying to reduce carbon emissions from 2.5 tonnes to 1.8-1.95 tonnes per tonne of steel.
“Viable green steel production could be more than a decade away even though several of the world’s major steelmakers are developing plans to meet carbon-neutral goals,” says JSW Group chairman Sajjan Jindal. “While prices of renewable electricity and green hydrogen are falling fast, the cost of setting up new plants—and shuttering old ones—will be a major barrier to change,” he said while addressing a Bengal Chamber of Commerce audience.
A TERI report, Towards a Low Carbon Steel Sector, authored by Will Hall, Thomas Spencer and Sachin Kumar, is more hopeful. It expects that more radical decarbonization technologies will be commercially available by 2040s. “Of particular interest is the hydrogen route, which involves substitution of coal or natural gas as a reducing agent with hydrogen. If hydrogen is produced from emission-free electricity, total iron and steel emissions can be reduced by 94 percent,” they say.
Building an Ecosystem
Industry and experts say building a policy-driven ecosystem is a must for a green hydrogen revolution. This includes setting up of electrolysation units and storage tanks close to manufacturing locations, building cryogenic tanks and incentives such as PLI scheme for electrolysers. IH2A says there is an opportunity to create a National Electrolyser Manufacturing Mission, aligned with existing FAME II scheme, and create three-four large electrolyser manufacturing companies. It has recommended a PLI scheme for hydrogen-related domestic manufacturing similar to the one for solar power and EVs, tax and policy incentives, state off take guarantees similar to that for renewable energy, new natural gas pipelines to accommodate hydrogen blending and incentives for large consortia hydrogen projects.
Costs, after all, are the biggest concern. For instance, the proton exchange membrane, which is the most stable, doubles the cost of an electrolyser. To reduce costs and increase manufacturing in India, development of alternative membranes should be prioritized. At present, annual coal cess collections of about Rs.24,000 crore are being used to support projects to improve India’s renewable energy output. This should be extended to hydrogen technology development, says Gupta, while batting for inclusion of fuel-cell EVs in FAME II. “Incentivised dollar-denominated loans for projects, concessional T&D lines and schemes like PLI can bring down project costs,” says Gopalan. “There is also a huge amount of research going on to increase capacity of electrolysers for scaling up production. That will happen soon,” says Seshagiri Rao.
Once these efforts bear fruit, industry will be well on its way to herald a green hydrogen revolution. Hydrogen, nature’s lightest and most abundant element, can be used as energy after being taken out from coal (brown hydrogen), natural gas (grey hydrogen), renewable energy (green hydrogen) and water (blue hydrogen). Technologies for doing so have been around for decades but are yet to become commercially viable as output is less than the energy used to produce the gas. But this is set to change with governments and companies making hydrogen an important part of their carbon neutrality goals. There is significant global interest in green hydrogen and countries are in the first stages of formulating a strategy and this will ultimately decide the winners and losers of the hydrogen economy. Given the right policies, India can emerge as the least cost producer and bring down the price of green hydrogen to US$ 1 per kg by 2030. While hydrogen can be produced from multiple sources, India’s distinct advantage in low-cost renewable electricity means that green hydrogen will emerge as the most cost-effective form. Hydrogen demand in India could grow more than fourfold by 2050, representing almost 10 percent of global demand. Given that the majority of this demand could be met with green hydrogen in the long-term, the cumulative value of the green hydrogen market in India could reach US $8 billion by 2030. The next steps at the policy level could involve arriving at the correct mix between mandates/regulations and price instruments.
- Near-term policy measures can bring down the current costs of green hydrogen to make it competitive with the existing grey hydrogen (hydrogen produced by natural gas) prices. Medium-term price targets should be set to guide the industry towards making green hydrogen the most competitive form of hydrogen.
- Government can encourage near term market development by identifying industrial clusters and enacting associated viability gap funding, mandates and targets.
- Opportunities around research and development and manufacturing of components like electrolysers need to be identified and appropriately encouraged with adequate financial mechanisms such as production-linked incentive (PLI) schemes to enable 25 GW of manufacturing capacity of electrolysers by 2028.
- A globally competitive green hydrogen industry can lead to exports in green hydrogen and hydrogen-embedded low-carbon products like green ammonia and green steel that can unlock 95 GW of electrolysis capacity in the nation by 2030.