India is developing a $2 billion incentive scheme for the green hydrogen industry in an effort to reduce emissions and establish itself as a major exporter in the sector, according to three sources cited by Reuters.
Senior government official and an industry manager involved in renewable energy said the $2.2 billion incentive intends to cut the cost of producing green hydrogen by a fifth. That should happen over the following five years. The plan is to accomplish this in part by expanding the industry’s size.
The manager reported that the price per kilogram is currently between 300 and 400 rupees in India. Incentives worth billions of euros have been approved by the US and the EU for green hydrogen projects.
They can use hydrogen as a fuel
Hydrogen is basically a fuel. We create it using the electrical process of electrolysis, which splits water. We know the result as green hydrogen, and it is a greenhouse gas-free fuel. The only condition is the electrolyzes that accomplish the process uses renewable energy as a fuel.
According to the government official, the Indian help could be disclosed in the budget released on February 1 for the fiscal year starting on April 1. Regarding a budget plan, all sources objected to being named.
Companies interested in H2
Adani Enterprises, JSW Energy, Acme Solar, Indian Oil, NTPC, Reliance Industries, and others have significant ambitions for green H2.
The third-richest person in the world, Gautam Adani, and France’s TotalEnergies announced in June that they will work together to build the biggest green hydrogen ecosystem in the world.
Green ammonia is a hydrogen derivative
According to the industry manager and another government official, the Indian government anticipates that by 2030, businesses will invest 8 trillion rupees in green hydrogen and its derivative green ammonia. Green ammonia production uses fusing nitrogen with H2 using renewable energy sources. They can use it as fuel or a practical way to move H2 into the fertilizer sector.
According to the manager and second official, the green hydrogen proposal will likely have the name “Strategic Intervention for Green Hydrogen Transition (SIGHT)”. It will be 45 billion rupees for electrolyte production for five years and 135 billion rupees for green hydrogen and green ammonia production for three years.
According to them, the incentive for producing green hydrogen will likely be 50 rupees per kg for three years.
India has ambitions
An industry official stated that India wants to sell 70% of the production to nations like South Korea, Japan, and the European Union, adding that derivatives like green ammonia had equally strong demand.
According to various industry sources, the government forecasts that the need for green hydrogen would increase from slightly under 75 million tons in the present to more than 100 million tons by the year 2030.
By 2030, India’s government intends to produce 5 million tons of green hydrogen annually. According to the first government official, a goal might increase depending on global demand, according to plans unveiled in February.
Producing capacities increase in India
The country’s manufacturing capacity for electrolyzers will reach 15 gigawatts by 2030, according to the government’s projections. It would almost be ten times the present global capacity.
A U.S. company has put into operation in Bengaluru the first green hydrogen factory in India called Ohmium International. Reliance Industries, Larsen & Toubro, Greenko, and H2e Power announced the intentions to construct gigawatt-scale facilities last year.
Each year, India’s steel, fertilizer, and oil refineries consume 5 million tons of grey H2, or H2 derived from natural gas. The process produces carbon dioxide.
The price of grey hydrogen in India has increased. From 130 rupees per kilogram, it is almost 200 rupees because of higher gas costs.