What do conglomerates like Reliance Industries Ltd, Adani Group, Larsen & Toubro Ltd, state-run companies like Indian Oil Corporation Ltd, NTPC Ltd, GAIL India Ltd, and renewable energy companies like ReNew Power, and ACME Group, have in common?
They are all keen to diversify into green hydrogen.
Prime Minister Narendra Modi launched the ‘National Hydrogen Mission’ from the Red Fort on Independence Day in 2021. On January 4, the Union Cabinet approved the National Green Hydrogen Mission with a total initial outlay of Rs 19,744 crore.
While the first financial commitment towards green hydrogen has only just been announced and details of the policy are yet to emerge, companies are already making plans for green hydrogen.
So what’s got them excited? This explainer answers some important questions but first the most elementary one.
What is Green Hydrogen?
Green hydrogen has become a global buzzword, especially as the world is facing its biggest-ever energy crisis and the threat of climate change is turning into a reality.
Hydrogen is the most abundant element in the universe. But pure, or the elemental hydrogen, is very scarce. It almost always exists in compounds like with oxygen to form H2O, or water. But when electric current is passed through water, it splits it into elemental oxygen and hydrogen through electrolysis. And if the electricity used for this process comes from a renewable source like wind or solar then the hydrogen thus produced is referred to as green hydrogen. Colours attached to hydrogen indicate the source of electricity used to derive the hydrogen molecule. For instance, if coal is used, it is referred to as brown hydrogen.
Why Green Hydrogen?
Hydrogen is a great source of energy because of its high energy content per unit of weight, which is why it is used as rocket fuel. Green hydrogen in particular is one of the cleanest sources of energy with close to zero emission. It can be used in fuel cells for cars or in energy-guzzling industries like fertilizers and steel manufacturing.
Countries across the world are working on building green hydrogen capacity as it can ensure energy security and also help in cutting carbon emission.
What does India aim to achieve with the National Green Hydrogen Mission?
The Mission states that India will develop green hydrogen production capacity of at least 5 million tonnes (MT) per annum with an associated renewable energy capacity addition of about 125 gigawatts (GW) in the country by 2030. This will entail over Rs 8 lakh crore of total investments and is expected to generate six lakh jobs. It will also lead to a cumulative reduction in fossil fuel imports by over Rs 1 lakh crore and an abatement of nearly 50 MT of annual greenhouse gas emissions.
What is India’s policy to promote investment in the sector?
Of the Rs 19,744 crore outlay announced by India on January 4, around Rs 17,490 crore will be towards incentives for the production of green hydrogen and the manufacturing of electrolysers. The government is referring to this as the Strategic Interventions for Green Hydrogen Transition Programme (SIGHT). Another Rs 1,466 crore will be for pilot projects, while Rs 400 crore is committed to research and development (R&D), and Rs 388 crore to other mission components, respectively.
The Ministry of New and Renewable Energy (MNRE) will formulate the scheme guidelines for implementation of the respective components.
The union minister for power and renewable energy RK Singh told reporters on January 5 that the government is also planning to waive off import duty on electrolysers for a short period to give an initial push to investment in green hydrogen production. He said the Rs 17,490 crore worth of incentives for production of green hydrogen and manufacturing of electrolysers will mostly be through production-linked incentive (PLI) schemes.
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