Sansad TV Perspective: Green Hydrogen

In the series Sansad TV Perspective, we bring you an analysis of the discussion featured on the insightful programme ‘Perspective’ on Sansad TV, on various important topics affecting India and also the world. This analysis will help you immensely for the IAS exam, especially the mains exam, where a well-rounded understanding of topics is a prerequisite for writing answers that fetch good marks.

Anchor – Teena Jha

Participants:

1. Dr. Vibha Dhawan, Director General, TERI
2. Dr. K. A. Subramanian, HoD, Energy Science and Engineering, Indian Institute of Technology, Delhi
3. Praful Pathak, President, SESI

Context

The Government of India recently notified the initial part of the flagship National Hydrogen Policy.

Phase 1 of the National Hydrogen Policy

• The Power and New & Renewable Energy Minister said the government is planning to produce 5 million tonnes of green hydrogen by 2030.
• The policy facilitates free and easy transfer of renewable energy inter-state which is used in the production of green hydrogen and ammonia.
• It also seeks to boost the usage of carbon-free fuel and make India an export hub. 

Incentives for the Industry

• It allows free power transmission for 25 years to any new renewable energy plants set up to supply power for green hydrogen production.
• A single portal for all clearances will be set up to facilitate green hydrogen production.
• Also, an institution will be set up for producers to store surplus renewable energy generated with Discoms for up to 30 days and use it as required.
• The Green Hydrogen / Ammonia manufacturers may purchase renewable power from the power exchange or set up renewable energy capacity themselves or through any other developer anywhere.
• The benefit of Renewable Purchase Obligation (RPO) will be granted incentive to the hydrogen/Ammonia manufacturer and the Distribution licensee for consumption of renewable power.

Significance of the policy

• The policy is said to be a significant step towards achieving a net-zero emissions target by 2070 as announced by the government in COP-26.
• The government through the policy has addressed some of the key demands of the industry such as open access, grid banking and faster approvals for green hydrogen and ammonia projects.
• The move will reduce the dependence on fossil fuel and in turn, reduce crude oil imports. 
• The objective of the policy is to help India emerge as an export Hub for Green Hydrogen and Green Ammonia.
• The production of green hydrogen is currently expensive and in this regard, the waiver of inter-state transmission charges for a period of 25 years, will help in reducing the cost of green hydrogen.
• The policy aims to produce emission-free fuel at $2 per kg, much lower than the current price of $5 per kg.
• The government’s measure of allowing banking of power for 30 days, will further improve the utilization of capital-intensive electrolyser assets. It will also lead to a lower production cost by up to 40%

Industry’s opinion

• Renewable energy industries welcomed the Policy and feel that it is the first concrete step in the direction of creating a favourable environment for the green hydrogen and ammonia sector in India.
• Industry feels that it is crucial to build upon the first phase to come up with measures for demand creation through setting up mandatory green hydrogen and ammonia purchase obligations.
• The industry also welcomed the decision to include biomass as a fuel for the generation of green hydrogen.

Advantages of Hydrogen as an Alternate Fuel

• Hydrogen is a clean source of alternate fuel that can be used to power the fuel cells of zero-emission vehicles.
• Hydrogen has a high potential for domestic production that can help in reducing the imports of fossil fuels.
• Hydrogen has high efficiency i.e. about 2 to 3 times more efficient than gasoline.
• Hydrogen can also be easily stored in tanks as it is lighter and also is easy for refilling.
• Solar energy though is another cleaner source of energy, it cannot be used in all kinds of industries.

Also read: Road to a Hydrogen Economy: RSTV – Big Picture

Ways to reduce the cost of Green Hydrogen

• Electrolyser design and construction – Increased module size and innovation with increased stack manufacturing have significant impacts on cost.
• Economies of scale – Increasing stack production with automated processes in gigawatt-scale manufacturing facilities can achieve a step-change cost reduction.
• Efficiency and flexibility in operations – Power supply incurs large efficiency losses at low load, limiting system flexibility from an economic perspective.
• Industrial applications – The design and operation of electrolysis systems can be optimised for specific applications in different industries.
• Ambitious climate mitigation – An ambitious energy transition, aligned with key international climate goals, would drive rapid cost reduction for green hydrogen.
• Use of Ammonia – Ammonia can be compressed to liquid form at relatively low pressures and is readily and reversibly stored within solids at high gravimetric densities, unlike hydrogen gas.

Way forward for the next phases of the policy

• The state governments should take the cue from this policy and extend benefits like waiver of intra-state transmission charges and electricity duty.
• The policy needs to address the challenges of the hydrogen producers by providing more clarity on demand-side initiatives such as hydrogen purchase obligations.
• There is also a need for clarity on measures to facilitate local manufacturing of electrolyzer.
• The policy must also look to include derivatives of green hydrogen other than green ammonia, such as methanol.

Conclusion

The policy is said to be in the right direction, which will help scale up the domestic production of green hydrogen by incentivizing the industry and other stakeholders. Past experiences have shown that policy interventions and infusion of funds will scale up the production, which results in the reduction of the costs, making green hydrogen affordable thereby increasing its usage and unlocking its export potential.

Read more summaries of Perspective in the link.

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