KPMG, the global consultancy, has released a report titled 'India's Green Hydrogen Ambition: Setting the wheels in motion', in which it says that the demand for hydrogen, by 2030, would double to 12 mtpa; a fifth to a third of it would be for green hydrogen.
By 2030, if the scenario plays out as expected, green hydrogen demand could comprise 20-30 per cent of the overall hydrogen demand which is expected to jump to almost double at ~12 MTPA.
Excerpts from the report:
** The transitions are likely to be fuelled by decarbonization pressures faced by these sectors as well as improvement in cost economics of green hydrogen. Beyond ‘drop in’ applications concerted efforts would be needed for adoption as these may require significant capex and process changes for changing the fuel/feedstock used.
Especially in industrial manufacturing where India is in the midst of a capex cycle it is essential to signal to capital to be deployed for green technologies and applications, including for green hydrogen.
For this to happen reasonable visibility on costs is needed. Aided by various policy measures, it is estimated that by 2030, the hydrogen costs will come down by 50 per cent.
These estimates can be aided by factors such as carbon pricing, further scale-led decline in electrolyser costs and innovations across the value chain to bring down cost and improve efficiencies.
** Government of India, on February 17, 2022, launched the Green Hydrogen Policy aiming at boosting the domestic production of green hydrogen to 5 MTPA by 2030, half of the EU’s target of 10 MTPA, and making India an export hub for the energy source.
At its core, the policy seeks facilitate green hydrogen adoption by bringing down the costs of green hydrogen and improving ease of setting up green hydrogen projects.
** Delivered costs of green hydrogen is typically driven by four main elements – renewable energy generation cost, cost of transportation, electrolyser capital costs, and operating costs. Transportation of hydrogen in the form of molecules over long distances is not cost economical at this time.
** Instead, the typical approach would be to transmit the electrical energy over the power transmission system and produce green hydrogen at or close to the consumption location. Using this model, the cost of green hydrogen production is estimated to be around INR 320-330 per kg (KPMG India Estimates). Cost of transmission typically constituted about 25-35 per cent of the cost of green hydrogen (pre-policy situation). Currently, the focus of India’s present policy is largely around the electricity transmission ecosystem.
I thank the write for sharing details about increasing use of Green Hydrogen in India. It is a commendable step towards promoting sustainability. The blog provides a comprehensive overview of India's green hydrogen ambitions, outlining the key objectives, initiatives, and challenges associated with this transformative technology. The author effectively conveys the significance of green hydrogen in achieving India's net-zero targets and highlights the government's efforts to promote research, development, and commercialization of this clean energy source.
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