Green hydrogen is emerging as a potential alternative to fossil fuels, reducing carbon emissions, and thereby decarbonizing industries that are difficult to electrify. Through the Green Hydrogen Mission, India foresees multiple opportunities in the green hydrogen market. This includes expanding green hydrogen infrastructure through renewable energy sources for producing, usage and exporting green hydrogen and its derivatives.

India aims to explore export opportunities in the global green hydrogen market. Through India’s Green Hydrogen Mission, the government aims to achieve 10% of the global green hydrogen demand of 100 MMT (Million Metric Tons) i.e. 10 MMT by 2030. 

Similarly, the expansion of the green hydrogen industry in India is leading to an increase in domestic demand for green hydrogen projects in India and electrolyzer manufacturing companies.

Current Green Hydrogen Scenario in India

Under India’s Green Hydrogen Mission, several initiatives are made by the green hydrogen companies such as: 

Gail Limited - on of the top green hydrogen companies in India started blending green hydrogen in the city distribution grid at the city gas station Avantika Gas Limited (AGIL), Indore, Madhya Pradesh. The green hydrogen is blended with natural gas in 2% by volume of hydrogen with CNG and 5% by volume of hydrogen with PNG network.

NTPC Limited began blending 8% volume in the PNG network at NTPC Kawas Township, Surat, Gujarat, in January 2023. 

Oil India Ltd developed 60 kW capacity hydrogen fuel cell hybrid buses that run on both renewable electricity and fuel cells.

Several PSU’s have initiated several projects such as: 

• Hydrogen based Fuel Cell Electric vehicle (FCEV) buses by NTPC in Leh
• Hydrogen based Fuel Cell Electric vehicle (FCEV) buses by NTPC in Greater Noida

Likewise, MNRE (Ministry of New & Renewable Energy) increased the annual allocation for green ammonia production from 5,50,000 to 7,50,000 tonnes per annum on 22nd June 2024.

Immense demand for India’s green hydrogen is foreseen, according to Blackridge’s global green hydrogen market report India’s green hydrogen market is projected to be worth USD 8 billion by 2030 and USD 340 billion by 2050. Likewise, according to Blackridge’s Global Electrolyzer Market report the electrolyzer market could be estimated to be worth USD 5 billion by 2030 and USD 31 billion by 2050.

How India is Boosting its Green Hydrogen Industry?

The push for green hydrogen is rapidly driven in the domestic and industrial sectors. Steel, refining, and fertilizer production are increasing the use of green hydrogen. 

For more such detailed insights check Blackridge's Global green hydrogen market report.

The green hydrogen evolution in India is expanded by focusing on the demand and supply of green hydrogen.

Demand for Green Hydrogen

The demand for green hydrogen in India is created through a staggered approach by dividing the green hydrogen industry into three categories: Domestic Demand, Exports, and replacing carbon-intensive alternatives.

Domestic Demand: The domestic demand is approached by supporting end-user industries such as: 

• The government of India aims to increase the use of green hydrogen in the refining and fertilizer industry through a direct subsidy of USD 0.50/kg.
• Implementing green hydrogen across industries like steel and cement by providing CapEx support through faster depreciation and discounted land rates. By launching standards for green hydrogen by products such as green steel to support migration towards energy based technology. 
• Greening the transportation field such as Heavy-duty vehicles (HDV), maritime and aviation by launching standards for fuel cells and further supporting it through R&D and pilot projects.
• Use in the cement and power industry by blending with existing energy and launching R&D and pilot projects.

Export Opportunities: Working with other countries to certify green hydrogen made in India according to importers' norms. India aims to become a global hub for green hydrogen production. The Green Hydrogen Mission aims to achieve 10% of the global green hydrogen demand of 100 MMT (Million Metric Tons) i.e. 10 MMT by 2030.

Tax/Carbon Credits: The government has initiated green hydrogen policy and regulations under its National Green Hydrogen Mission that will promote the green hydrogen adoption on a wide scale and thus ensuring energy security.

Supply of Green Hydrogen

The supply of green hydrogen (clean hydrogen) can be enhanced by achieving green hydrogen cost to be less or equal to its competitive grey hydrogen, which is USD 2/kg.

• Minimizing the cost of RTC RE (round-the-clock renewable energy) to be lower than INR 2 (USD 0.02/kWh) through monetary incentives and reducing the wheeling charges across all states.
• Reducing the electrolyzer cost: Increase incentives for the duration of electrolyzers beyond five years to achieve a longer capex cycle of electrolyzers.
• Lower the transportation, storage, and conversion costs.
• Encourage companies to form clusters and big for government incentives to achieve quick clearances and minimize the need to expand infrastructure.
• Increase in R&D to upgrade the existing electrolyzer technology.

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Factors Affecting Green Hydrogen Plant Setup in India

The setup cost of a green hydrogen plant in India depends on several factors such as the size of the plant, the location, the technology used and the estimated cost of production.

• Plant Capacity: The plant capacity is one of the largest factors that influence the setup cost of a green hydrogen plant. Often larger plants lead to reduced production cost per unit due to bulk purchases, large scale production and high efficiency processes. On the converse, small size plants lead to a lower CapEx and lower initial investment requirements.

• Location: The proximity to renewable sources such as solar energy and wind can influence the land costs, transportation costs and lower the electricity costs. For example, in northern India, Rajasthan has the highest installed solar power capacity but is far from the green hydrogen production centers in the Mumbai-Pune industrial hub.

• Production Costs: Currently, the production cost of green hydrogen in India is about USD 4-5/kg as of January 2024, which is twice the production cost of grey hydrogen. The Indian government has provided subsidies of up to USD 0.50/kg to reduce the production cost. An additional subsidy of USD 54/kW is also provided for electrolyzer manufacturers to cut down on green hydrogen production costs and reach a price of USD 2/kg or lower.

• Infrastructure Costs: The storage systems installation and maintenance influence the setup cost and the RTC renewable energy costs by 30-40%. Likewise, transmission and distribution (T&D) account for 20-30% of the costs. State governments like Maharashtra, allowed a 50% concession on transmission charges and 60% concession on the wheeling charges for the green hydrogen projects in the next 10 years. Thus, bringing down the T&D costs from INR 1.5 (USD 0.02/ kWh) to INR 0.4 (USD 0.005/kWh) assuming a full waiver on interstate charges and a 50% exemption on intra-state charges.

• Technology: The cost of electrolyzer costs about 30-50% of the total green hydrogen energy production cost. The type and capacity of the electrolyzer capacity influence the cost of the electrolyzer. Alkaline (ALK) electrolyzers and Proton Exchange Membrane (PEM)electrolyzers are most commonly used in green hydrogen production plants. However, alkaline electrolyzers are more cost-effective than PEM electrolyzers. However, PEM is preferred due to its operational flexibility and reaction efficiency.

Challenges in India’s Green Hydrogen Industry

• Cost Competitive: The production cost of green hydrogen (clean energy) is USD 4-5/kg as of January 2024, which is twice the production cost of grey hydrogen. Initiatives must be adapted to make green hydrogen production cost competitive compared to traditional fossil fuels. 
• Conversion & Reconversion: Compared to its derivatives such as ammonia and e-methanol, the conversion of hydrogen to its derivatives requires infrastructure to transport hydrogen to the point of consumption, especially in case of long distances such as exports, India lacks the infrastructure with logistic gaps.
• Storage Facilities: High costs of green hydrogen transportation is one of the blockages in the effective transportation of hydrogen. Currently, hydrogen is transported through shipping, gasses or liquefied hydrogen through pipelines.   

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Summary

India targets to produce 5 MMT of green hydrogen annually and increase its renewable energy capacity to 125 GW in the country. Through the National Hydrogen Mission the government is actively promoting the production, usage, and export of green hydrogen and its derivatives.

Blending green hydrogen with natural gas in city distribution grids, increasing green ammonia production capacity, and developing hydrogen-powered vehicles have led to a surge of green hydrogen usage across India. Thus, India continues its journey towards achieving its green hydrogen goals.

FAQ’s

Does green hydrogen have a future?

Yes, the green hydrogen industry is expanding across various countries and sectors. According to Blackridge’s global hydrogen market report, the global green hydrogen market will reach 150 GW of production capacity by 2030.

Which company will produce green hydrogen in India?

ADANI Green Energy, Reliance Industries Ltd and Indian Oil Corporation Ltd are few of the top green hydrogen companies in India.

What is India's green hydrogen target by 2030?

Under India’s Green Hydrogen Mission, India aims to produce 5 MMT of green hydrogen annually by 2030.  

What is the future of hydrogen in India?

Green Hydrogen is rapidly being implemented across India by blending natural gas in city distribution networks, promoting hydrogen fuel cell vehicles and increasing green hydrogen derivatives production through government-led policies and programs.

What is the hydrogen demand in India in 2030?

India aims to increase its green hydrogen share to 46% in the global hydrogen demand by 2030 by expanding its market size through increased green hydrogen production and its associated electrolyzer technologies.

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