A hydrogen economy can have huge dividends for India, Energy News, ET EnergyWorld

New Delhi: According to the Union’s Department of Statistics and Program Implementation, India produced 15,311 petajoules of energy in 2020, 81% of which came from fossil fuels such as coal, oil and natural gas. In fact, fossil fuels have been the fuel of choice for decades, even though they are permanently damaging our environment. With India producing an estimated 35,825 petajoules of energy by 2040, according to the International Energy Agency (IEA), moving to an alternative clean energy source is the order of the day.

Nuclear power is an excellent option, but is less preferred because of geopolitics (nuclear fuel can be weaponized and lead to international sanctions). Using energy from renewable sources such as hydro, solar and wind is fast becoming a choice for future investments as electrification has enormous potential to replace several fossil fuel applications. However, many applications such as iron making, aviation fuels, etc. cannot be electrified and hydrogen can play an important role in replacing fossil fuels.

Why hydrogen?

Hydrogen combined with air creates energy and water vapor. Hydrogen contains more energy per kg than several fuels. Most importantly, hydrogen is not only a fuel, but also serves as a raw material in the refining, fertilizer and chemical industries, and is gradually replacing carbon as a raw material in the iron and steel industry as well. Thus, only one hydrogen production plant can meet the needs of multiple applications.

In contrast to fossil fuels, which are readily available in natural form, hydrogen must be obtained from raw materials such as natural gas, water or biomass. To make zero-emission hydrogen or green hydrogen competitive with fossil fuels, its price should be between INR 75 and INR 150 / kg. Gray hydrogen, made from natural gas, is already available for 150 INR / kg, but it emits 9.21 kg of CO 2 per kg of hydrogen produced and is therefore not a preferred choice. Alternatively, hydrogen can also be produced by splitting water using pure electricity with no emissions through a process called water electrolysis. Historically, however, this process has been plagued by electricity costs.

The decline in RE prices to an all-time low of $ 0.05 / kWh and a huge inflow of funds last year have spurred the launch of 359 major green hydrogen projects around the world, including one in India by Reliance Industries, as reported by the Hydrogen Council. However, since the demand for hydrogen is highly dependent on policy enforcement, administrations have a key role to play.

Dividends for India

India currently has a hydrogen production capacity of 6 million tons per year (Mtpa). Most of this capacity is self-managed and is mainly produced with natural gas in refineries and in the fertilizer industry. In a hydrogen economy, production technologies would have to be converted to more environmentally friendly methods such as electrolysis. New demand sectors – green steel, green ammonia, green methanol, green fuel, etc. – would create a projected demand of 40 Mtpa by 2060, according to a study.

With the launch of the National Hydrogen Mission and the Indian government’s decision to focus on green hydrogen, the following are the foreseeable benefits for India.

Aatma Nirbhar Bharat

About 40% of India’s energy needs are imported today at a cost of $ 160 billion. By moving to a hydrogen economy, India will not only be able to reduce imports of oil, coal and natural gas, but it will also be able to export hydrogen to other countries in Europe and Asia. Thanks to its geographic location, India has the potential to produce 210 Mtpa (598 Mtoe) of hydrogen from sun and wind and meet 32% of the hydrogen needs in the Asia-Pacific region (APAC).

Early mover advantage

Around 111 Mtpa of hydrogen were produced worldwide in 2020, with two thirds of the demand coming from refining and ammonia. This demand is estimated at 212 million tpa, with Indian domestic demand amounting to 9 million tpa by 2030 and spanning various sectors. The hydrogen economy, currently at $ 136 billion, is set to become a $ 2.5 trillion market and is expected to create 30 million jobs by 2030.

In light of the opportunity, Reliance Industries has announced an INR 75,000 Cr investment in green power, which includes electrolyzer and fuel cell mega-factories. NTPC Limited and Indian Oil Corporation have announced green hydrogen production, while Indian Railways is exploring retrofitting diesel engines with fuel cells to run on hydrogen. Jindal Steel is also investigating green steel production while the central government plans to include hydrogen in the commitment to purchase renewable energy and use green hydrogen in fertilizer production and petroleum refining.

Climate impacts

India’s contribution to emissions in 2019 was 2.62 GtCO2. The transition to a hydrogen economy is estimated to have the potential to reduce global CO 2 emissions by 6 Gt annually.


By moving to a hydrogen economy, India, as an energy exporter, can reduce imports and change the geopolitical landscape. In this emerging market, with a deep understanding of demand opportunities, as well as a clear vision and the right political structures, India can make good dividends from its hydrogen economy. Greater transparency from the National Hydrogen Mission about its activities, the rapid delivery of a Hydrogen Mission document from the Ministry of New and Renewable Energy and a detailed project report from the Ministry of Science and Technology would help to better understand India’s evolution in hydrogen demand.

[This piece was authored by Viswanath Dibbur. He works as a consultant with the Center for Study of Science, Technology and Policy (CSTEP), a research-based think tank]

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