New Delhi: India is keen not to miss the green hydrogen boat sailing into the horizon, but our ambition of becoming a global “manufacturing hub” of green hydrogen is one that will have to be built nearly from scratch.
There are only a handful of manufacturers in the sector in India at the moment, of which only a few have decades of experience producing electrolysers — the main component that distills hydrogen from water.
Last month, the Union cabinet approved the ‘National Green Hydrogen Mission’ with an outlay of Rs 19,744 crore for research, production and export of green hydrogen and its derivatives.
Large industrial companies — including Reliance, Adani and Larsen & Toubro — have thrown their weight behind the mission.
India will still have to earn its spot on the world map by competing with countries that have advanced green hydrogen infrastructure.
According to a 2022 report by the Hydrogen Council, an energy group with members from across the world, China leads in the deployment of electrolysers (at 200 megawatts) and Europe has the highest share of proposed investments in the sector (around 30 per cent).
There are also concerns about safety, cost of production, and retrofitting existing systems to accommodate a volatile fuel that’s never been used at the scale being envisioned.
Hydrogen can become extremely flammable when not in its pure state, and challenges on its end-use can cloud its prospects in India, experts say.
But among the Green Hydrogen Mission optimists is Siddharth Mayur, CEO of Pune-based renewable energy company H2E Power Systems.
“Smaller companies like us are driven by a motivation to scale up clean energy. The big boys bring in the money and the attention needed to propel the industry,” Mayur told ThePrint.
“Building up India’s green hydrogen infrastructure is going to be hugely collaborative. We’re already talking to everyone and anyone in the business. Yes, there are challenges, but things are moving along and looking up,” he added.
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Sunrise sector with hurdles ahead
Green hydrogen has been touted as the “fuel of the future” — with the means to decarbonise some of the world’s most carbon-intensive industries — and has the potential to bring the world to net-zero emissions, an essential ingredient to limit the effects of global warming.
The government’s push for green hydrogen has given a new lease of life to Chintan Tewari’s business. Tewari is managing director of Eastern Electrolyzer, among the oldest manufacturers of green hydrogen plants in the country.
The last time business had boomed for him was in the 1980s, when hydrogenated vegetable oil — a trans fat that came to be known by the brand name ‘Dalda’ — was marketed as a healthy alternative to desi ghee. Hydrogenated oil is one of the few processes that relies on green hydrogen.
In 1994, when science decisively declared trans fats as harmful for health and responsible for 30,000 deaths in the US, the popularity of hydrogenated oil plummeted, and with it Tewari’s business.
“The Covid-19 pandemic was almost the nail in the coffin for my business. But now it feels like the industry has risen from the ashes. There’s immense interest (in green hydrogen), and so many possibilities that weren’t considered before,” he said.
Eastern Electrolyzer will deliver India’s first-ever export of a readymade green hydrogen plant to Chile, Tewari told ThePrint, where hydrogen is likely to be used in blended form with natural gas.
Grey vs green hydrogen
Hydrogen is considered a prolific source of energy because of its high calorific value, meaning it can produce a lot more energy per kilo compared to energy derived from fossil fuels like oil, gas, and coal.
It is used extensively in oil refineries, to desulphurise crude oil to make petrol, diesel and other chemicals. It’s also used in the production of fertilisers, where it is extracted from natural gas and combined with nitrogen to make ammonia.
The problem is that the cheapest way to make hydrogen used in these industries is through the gasification of coal or gas, resulting in high carbon dioxide emissions — the primary greenhouse gas driving global warming.
Hydrogen produced this way is called “grey hydrogen”.
India consumes between 5 and 6 million metric tonnes of grey hydrogen per annum. The government says that by replacing grey hydrogen with its green counterpart, it can result in emissions reduction of 50 million metric tonnes by 2030.
The production of green hydrogen has become an attractive prospect because its extraction — and combustion — results in negligible, if not nil, carbon emissions.
The process is what’s taught in most basic chemistry textbooks — the electrolysis of water, but with electricity generated from renewable sources. However, the electrolysers used in the production of green hydrogen resemble anything but the simplistic diagrams in chemistry notebooks.
The plants Tewari’s firm have designed are sophisticated, compact machines. They have an extensive network of electrical wires that deionizes the water, powers the electrolyser, dries the gas, keeps it cool, and ensures it doesn’t mix or leak. The result is hydrogen that is 99.999 per cent pure and engineered to ensure the highest standards of safety.
There is no other choice — hydrogen becomes extremely flammable when mixed with 4 to 6 per cent of oxygen.
Impressive as the plants are, they also reveal the limitations of producing green hydrogen at the moment.
One of Tewari’s plants producing 30 cubic metres of green hydrogen per hour costs $360,000 — “a fraction of what it costs in the west, because I use both imported and indigenous parts to make it,” he said. But it’s still high, nonetheless.
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The current cost of producing 1 kg of green hydrogen is between $5.5 and $6 — far too expensive for large scale manufacturing. For it to become commercially viable, the price must drop to around $1-2 per kg.
“The largest single-stack plant being indigenously manufactured in India will be able to produce 500 cubic metres of hydrogen an hour,” said Tewari, whose company is making the plant for Hindustan Petroleum Corporation.
While hydrogen has good gravimetric energy density, or the amount of energy carried per unit of weight, it fares poorly when it comes to volumetric energy density, meaning a much larger volume is needed compared to other fuels.
“On a volumetric basis, hydrogen’s energy density is a quarter that of jet fuel, and only 40 per cent of that of LNG (liquefied natural gas),” energy advisor Michael Liebreich wrote in a BloombergNEF article last year.
Its low volumetric density makes storing it difficult. It’s compressed at a high rate — much higher than CNG (compressed natural gas) — and stored in special containers that can withstand the pressure, but are again expensive to make.
To avoid the challenges of storage, green hydrogen plants can also be installed “on site” in refineries or fertiliser factories, which supply hydrogen as and when the factories require them.
But even here, another host of challenges emerge.
“There’s a big debate about what the definition of green hydrogen should be, or how ‘green’ green hydrogen should be,” said Hemant Mallya, fellow at the Council on Energy, Environment and Water (CEEW).
The production of green hydrogen depends on renewable power sources like solar and wind, which are variable sources with inconsistent supply.
One solution is to build renewable energy storage systems that can store excess generation during peak hours — another capital expense which will push costs of production even higher, since battery storage systems are still being developed.
A second solution is to connect the renewable source to the grid, so that it can supply the plant with electricity when the renewable source cannot.
“Since our grid is mostly fossil-fuel based, the hydrogen produced from such an operation wouldn’t be strictly green hydrogen,” said Mallya, adding, “Our proposal is that the hydrogen not be completely green, because the costs will just escalate. Instead, it should be linked with the grid with differentiated pricing.”
In a recent paper, the CEEW has suggested easing the high cost of transitioning to green hydrogen by first creating a market for “turquoise hydrogen” — a process that involves the thermal decomposition of methane at high temperatures, which produces hydrogen with fewer carbon emissions compared to existing methods.
According to the CEEW paper, turquoise hydrogen is priced at just $1.6 per kg, making it competitive.
“What we are saying is, create the demand, create the market with turquoise hydrogen in the near future over, say, 5 to 7 years. Once that scale is achieved, that’s when green hydrogen can come and bring in price competitiveness. Eventually green hydrogen will be cheaper than grey or turquoise, and therefore it’s a seamless transition,” Mallya said.
‘We should compete at global level’
Under the Rs 19,744-crore Green Hydrogen Mission, India has allocated Rs 17,490 crore of the sum for ‘Strategic Interventions for Green Hydrogen Transition Programme’, which includes, apart from the production of green hydrogen, scaling up domestic manufacturing of electrolysers.
The rest is divided between establishing pilot projects that use green hydrogen (Rs 1,466 crore), research and development (Rs 400 crore) and “mission components” (Rs 388 crore).
With a leg up from the Green Hydrogen Mission, Mayur’s H2E renewable energy company is taking its first few steps into the green hydrogen sector, and with big dreams.
The company is in the midst of setting up a manufacturing unit for “stacks” — the costliest part of a green hydrogen plant which does the heavyweight job of not only splitting water into two elements, but also ensuring the operational safety and stability of the plant.
“We’re putting together an ecosystem to make sure that each of the parts that goes into making a stack can be made here,” said Mayur.
For him, subsidies to kickstart the process have been immensely useful, and the challenges that might emerge from production are problems for the future.
But for an old timer like Tewari, whose expertise has been in demand since the interest in green hydrogen swelled, having no policy is better than a policy that “inadvertently benefits larger corporations” stepping into the sector, he said, referring to announcements under the Green Hydrogen Mission.
“I don’t think there are any great benefits to be had from making green hydrogen (part of) ‘Aatmanir Bharat’, since the supply chain is global. We should compete at a global level,” he advised.
“Production-linked incentive schemes are good, but they are geared to benefit larger corporations that have the capital,” he said, adding: “Speaking as a supplier of green hydrogen plants, large corporations are happy to take the credit for getting involved, but they push all contractual risks onto the MSMEs. Risk should be borne proportionate to risk-bearing ability, but there’s no policy for this.”
Addressing problems
In a 2021 blog, Sivapriya Bhagavathy, an energy researcher with the Power Networks Demonstration Centre at University of Strathclyde in Glasgow, co-wrote a checklist of the hurdles green hydrogen might face at every stage of production, distribution, and end use.
The hurdles included low lifetime of electrolysers, pipelines becoming brittle with even a small concentration of hydrogen, and supply chain development for the transport and storage of hydrogen.
“Green hydrogen has the potential to act as a lever to decarbonise the energy sector, especially the hard-to-reach areas of heating and heavy-duty transport,” the post noted, adding that “for maximising the potential and (for) commercialisation”, the challenges would need to be addressed.
A roadmap of the Green Hydrogen Mission, which was released by the Ministry of New and Renewable Energy last month, indicates the mission will try to address the challenges simultaneously and resolve them as soon as possible.
According to the plan, the mission will “facilitate notification of all requisite (safety) standards and regulations by the end of 2023-24” for the use of green hydrogen. It will also oversee multiple pilot projects ranging from automobiles to shipping.
The Shipping Corporation of India “will retrofit at least two ships to run on green hydrogen or other green hydrogen-derived fuels by 2027”, according to the ministry document.
“All regulatory provisions (or amendments in existing regulations) to permit operation of hydrogen-fuelled vehicles and other applications will be notified within 12 months of the notification of the mission,” the documents says.
The ministry also proposes deploying hydrogen fuel cell electric vehicles “in a phased manner on pilot basis”.
According to Mallya, the success of the policy lies in how the production-linked scheme is finetuned.
“If it is curated well, and if it bridges the capital-premium gap (or cost) between grey and green hydrogen, then we can anticipate a healthy manufacturing base. The policy should also work to make demand-side measures stronger, by mandating purchase obligations on industries that rely on hydrogen as a raw material. Lastly, the end-use issues need to be sorted, but that’s likely to take some time,” he said.
(Edited by Nida Fatima Siddiqui)
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