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Green Hydrogen Revolution: Reliance, John Cockerill, L&T, Adani Set Sights on 1,500 MW Production

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Green Hydrogen Revolution: Reliance, John Cockerill, L&T, Adani Set Sights on 1,500 MW Production
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Indian Power Capacity – Overview

While India holds the flag of Green energy, is the host of the International Solar Alliance, and is pushing hard on electric vehicles, most of our energy needs are met by burning fossil fuels, negating all the efforts. Hence, India is taking a giant leap towards a sustainable future, with green hydrogen emerging as a game-changer in its energy sector From Nitin Gadkari to Hardeep Singh Puri and Nirmala Sitharaman to Narendra Modi have been emphasizing the same for more than half a decade. Today, we’ll dive into India’s green hydrogen ambitions and how the upcoming Budget 2024 is expected to fuel this exciting new industry.

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Reference: Niti.gov.in

National Green Hydrogen Mission: A Vision for Clean Energy

The Indian government launched the National Green Hydrogen Mission (NGHM) with a clear objective: to establish India as a global green hydrogen hub by 2030. This ambitious mission aims to produce a massive 5 million metric tonnes of green hydrogen annually, attract investments exceeding Rs 8 lakh crore, and create over 6 lakh jobs.

It also helps India cut down on the import of fossil fuels, whose wells are drying and prices are rising at an unprecedented rate. This prevents India from entering an energy crisis during any geopolitical shift.  

Budget 2024: A Shot in the Arm for Green Hydrogen

Budget 2024 could be a turning point for green hydrogen in India. Here’s how:

  • Strategic Interventions for Green Hydrogen Transition (SIGHT): This program promises a war chest of Rs 17,490 crore to incentivize electrolyzer manufacturing and green hydrogen production. Electrolyzers are crucial for hydrogen production through electrolysis, and this scheme aims to reduce their costs significantly.
  • Infrastructure and R&D Boost: The significant increase in the budget allocation for the National Green Hydrogen Mission signifies a multi-pronged approach. We can expect a push to establish manufacturing facilities, ramp up research and development, and create export hubs for green hydrogen.
  • Production-Linked Incentive (PLI) Scheme for Electrolysers: This scheme is already showing positive results. Leading Indian companies like Reliance, L&T, and Adani are gearing up to manufacture electrolyzers domestically by 2025, ahead of the official deadline. Strategic partnerships are also accelerating the process.
Reference: PV Magazine

Decoding the PLI Scheme: A Boon for Electrolyzer Manufacturing in India

The Production-Linked Incentive (PLI) Scheme for Electrolysers is a game-changer for India’s green hydrogen ambitions. Let’s delve deeper into how this scheme is driving the domestic manufacturing of electrolyzers, the backbone of green hydrogen production.

What is the PLI Scheme?

The PLI scheme is a government initiative that provides financial incentives to companies that establish or expand manufacturing capabilities in India. In the context of electrolyzers, the scheme offers financial assistance to companies that set up domestic production units. These incentives are designed to:

  • Reduce production costs: The PLI scheme aims to reduce the cost of electrolyzers manufactured in India. Manufacturing 1 kilowatt (kW) of energy using an Electrolyzer costs Rs 50,000 before the PLI, but it will cost Rs 47,000 after the PLI. However, it’s a long road to catch up on, as China is able to achieve the same results at the cost of Rs 33,000. This is crucial for making green hydrogen more competitive with traditional fuels.
  • Boost domestic manufacturing: The scheme offers financial support to encourage companies to shop in India, creating a robust supply chain for electrolyzers.
  • Promote technological advancements: The PLI scheme can encourage companies to invest in research and development, creating more efficient and cost-effective electrolyzers.

Early Success and Future Prospects

The PLI scheme for electrolyzers has already generated positive results. Leading Indian companies like Reliance, L&T, and Adani are fast-tracking their plans to set up domestic manufacturing units. This not only positions them to benefit from the incentives but also helps them achieve the 2026 production deadline well ahead of schedule.

L&T commissioned its first indigenously manufactured hydrogen electrolyzer at the green hydrogen plant in Hazira, Gujarat, on March 1. With a power capacity of 1 MW (expandable to 2 MW), the electrolyzer is equipped with two stacks and an indigenously manufactured and assembled electrolyzer processing unit.

Strategic partnerships between Indian companies and global technology holders further accelerate the process. This ensures access to cutting-edge technology and expertise, putting India at the forefront of electrolyzer development.

The Road Ahead

The PLI scheme and the increased budgetary allocation for the National Green Hydrogen Mission in Budget 2024 signifies the government’s commitment to fostering a thriving green hydrogen ecosystem in India. As domestic manufacturing scales up, electrolyzer costs are expected to decrease, paving the way for a more affordable and accessible green hydrogen future.

Challenges and the Road Ahead

While India’s progress is commendable, there are hurdles to overcome. High production costs, unclear regulations, and limited infrastructure are some of the key challenges.

  • High Production Costs: Green hydrogen production is currently expensive compared to traditional fuels. Bringing down the cost of electrolyzers and renewable energy sources is crucial.
  • Unclear Regulations: A well-defined regulatory framework is needed to streamline project approvals and provide clarity for investors.
  • Limited Infrastructure: Building a robust infrastructure for the transportation, storage, and distribution of green hydrogen is essential for large-scale adoption.
  • Water Scarcity: Electrolysis requires significant water. In water-scarce regions, creative solutions like seawater desalination plants might be necessary.

The upcoming budget is expected to address these issues with targeted subsidies, tax breaks, and a clear roadmap for building a robust green hydrogen ecosystem. Additionally, creative solutions are needed to address the water needs of electrolysis, especially in water-scarce regions. Seawater desalination plants might play a crucial role in ensuring sustainable green hydrogen production.

Conclusion

India’s commitment to a clean energy future is clear. With its ambitious green hydrogen plans and the upcoming Budget 2024 acting as a catalyst, the nation is well on its way to becoming a leader in the global green energy race.

FAQs

  1. What is green hydrogen?

    Green hydrogen is hydrogen produced using renewable energy sources like solar or wind power to split water molecules through electrolysis. Unlike traditional methods that rely on fossil fuels, green hydrogen production is emission-free.

  2. Why is green hydrogen important for India's energy future?

    Green hydrogen offers a clean and sustainable alternative to fossil fuels. It can be used in various sectors like transportation, industry, and power generation, helping India reduce its dependence on imported oil and achieve its clean energy goals.

  3. What are the key goals of the National Green Hydrogen Mission (NGHM)?

    The NGHM aims to:
    Establish India as a global green hydrogen hub by 2030.
    Achieve an annual production capacity of 5 million metric tonnes.
    Attract over Rs 8 lakh crore in investments.
    Create more than 6 lakh jobs.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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