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Ambani, Adani in India’s green hydrogen rush but hurdles remain

Hydrogen packs much more punch than lithium-based batteries. India’s federal minister Nitin Gadkari (second from left) seen right here launching the nation’s first green hydrogen-based superior gas cell electrical car (FCEV), Toyota Mirai, at his residence in March.

Hindustan Times | Hindustan Times | Getty Images

The solar’s searing warmth will be punishing on summer season days and India’s huge shoreline makes it a problem to defend. But huge quantities of water and ample daylight have opened a path to green vitality that would slake India’s huge urge for food for gas.

Indian firms have pledged to commit billions of {dollars} to green hydrogen initiatives — but consultants warning that the know-how continues to be very new and its business viability unproven.  

Green hydrogen is a clear gas that is produced by splitting water into hydrogen and oxygen, utilizing renewable vitality equivalent to solar energy. When burnt, it emits no exhaust, solely water. Environmentalists declare it might probably assist decarbonize heavy industries like oil refining, fertilizers, metal and cement, in addition to assist minimize emissions globally.

“At this point, the technology is not mature or cheap enough to be used widely,” Amit Bhandari, senior fellow, vitality and funding at Gateway House, a Mumbai-based suppose tank, advised CNBC. He pointed to the instance of photo voltaic vitality which took a few decade to change into viable.

The green hydrogen trade continues to be in its infancy and pilot crops to review the know-how and prices will take at the least 5 years to point out outcomes, Bhandari mentioned.

“Ten years ago, if you had asked me if solar energy is viable, I would have said ‘no,’ even though solar power potential was known and technology was available. It took off only when the cost became comparable to traditional energy sources over a long period of time,” Bhandari mentioned, including that he was reluctant to write down off a brand new know-how.

Renewables at present account for almost 40% of total installed capacity in India, the world’s third largest crude oil importer after China and the U.S.

But with out large-scale vitality storage, renewable vitality can not change into a viable various to conventional energy sources. 

Lithium batteries can not retailer vitality at a big scale though they’re extensively used to energy electrical automobiles. Green hydrogen, which will be saved in giant quantities, can energy heavy automobiles equivalent to vehicles over lengthy distances. 

India’s authorities final year introduced a nationwide green hydrogen coverage with a goal of manufacturing 5 million tons of the fuel annually by 2030. In February, it supplied tax breaks and allotted land to arrange crops to spice up the funding

Right now, India is weak to all method of exterior and geopolitical shocks. With green hydrogen, that vulnerability will cut back.

Amit Bhandari

Senior fellow, vitality and funding, Gateway House, Mumbai

“Two important resources are required to become a large global player: water and cheap power,” the chairman of Celeris Technologies, Venkat Sumantran, advised CNBC. “India has a large coastline with access to seawater and ample sunlight.” 

Several states in India get good daylight a lot of the year and this enables photo voltaic panel farms to be optimally deployed, mentioned Sumantran, whose Chennai-based consultancy agency supplies new vitality options to fossil fuels in the auto sector.

But changing into a world participant additionally will depend on how cheaply photovoltaic cells — which convert daylight into vitality — are produced. “There are many signs that policies to allow this to happen are being implemented,” he added.

Indian firms investing in hydrogen

In current months, a number of Indian firms have introduced green hydrogen plans:

  • In January, India’s largest company by market capitalization Reliance Industries introduced it might commit $75 billion to green vitality, together with an undisclosed quantity  towards green hydrogen initiatives. 
  • In early April, Hyderabad-based Greenko group and Belgium-based John Cockerill to build a two-gigawatt hydrogen electrolyzer gigafactory in India, the biggest outdoors of China.
  • In March, state-owned Indian Oil Corporation, which accounts for practically half the market share of India’s petroleum merchandise, teamed up with two non-public firms to launch a three way partnership to develop green hydrogen. There are additionally plans to fabricate and promote electrolyzers, used in the manufacturing of green hydrogen.
  • In November 2021, the world’s largest solar energy developer Adani Group introduced it might make investments $70 billion by 2030 into renewable vitality infrastructure, together with in green hydrogen. 

Reliance Industries and Adani Group have each pledged to make the world’s least expensive green hydrogen at $1 per kilogram, or a few quarter of a gallon — that is down from the present price of $5-$6. When contacted by CNBC, neither company supplied particulars on how they have been going to deliver down the prices so drastically. 

Green hydrogen fuels India’s geostrategic ambitions too.

Reliance Industries Chairman Mukesh Ambani predicted that green vitality has the potential to be a gamechanger. 

“When wood was replaced with coal, Europe overtook India and China to emerge the world leader. With the emergence of oil, the U.S. and West Asia outgrew others,” he mentioned at a convention on renewables in February in Pune, a western Indian metropolis.  

“When India becomes not only self-sufficient in green and clean energy, but also a large exporter, it will help India emerge as a global power,” he mentioned at the moment.

Acknowledging there was a variety of hype round green hydrogen, Bhandari from Gateway House mentioned it was not essentially a foul factor.

“A key thing is that hype can create its own reality. If there is the right amount of capital, human intelligence is thrown at a problem. And technology evolves. Costs start to fall and that creates demand,” he mentioned.

“Momentum is on the side of innovation and costs are declining. Also, there is already demand for green hydrogen, which can be absorbed right away in the petroleum refining, fertilizer and steel industries,” he added.

Pilot initiatives wanted

Green hydrogen will change into commercially viable solely when it turns into cheaper, Bhandari famous. 

“You cannot start with a 500 megawatt plant,” he mentioned, including that even a company like Reliance, which has had lengthy expertise dealing with hydrogen gasoline at its oil refineries, wouldn’t make investments in an enormous plant with out pilot initiatives. “We are several years away from large-scale capacity,” he mentioned.

Tapping India’s 7,500 kilometer lengthy shoreline can also be sophisticated, Bhandari mentioned.

“There are other claims on the coastline. It is not uninhabited. There are several large cities and ports. And, it must be weighed against the need to protect mangroves and other fragile ecosystems too,” he mentioned. 

Still, he conceded that if profitable, the green hydrogen push would make India much less weak to cost shocks in pure gasoline and oil.

“Right now, India is vulnerable to all manner of external and geopolitical shocks. With green hydrogen, that vulnerability will reduce,” he mentioned.

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