Green hydrogen production cost three times costlier than grey: Shuboday Ganta and Somesh Kumar – EY India – EQ Mag Pro
India’s green hydrogen market is currently in the nascent stages of development
We got in touch with Shuboday Ganta, vice-president – Power & Utilities, EY India and Somesh Kumar, Partner and National Leader – Power & Utilities, EY India to unerstand India’s hydrogen landscape better. Edited excerpts:
Where do you see India as a green hydrogen market in the coming years? Can you share It is estimated that over ~6 million tonnes of grey hydrogen is produced annually in
India using steam methane reformation powered by fossil fuels with CO2 emissions. This hydrogen is consumed as feedstock or process gas in various industrial applications including petroleum refining, ammonia production in fertiliser industry, methanol production in chemical industries, treatment and production of metals and food processing. Chlor-alkali industries also produce hydrogen as a by-product.
The International Energy Agency (IEA) in its ‘Global Hydrogen Review 2021’ has estimated 90 million tonnes of global demand for hydrogen in 2020. Out of this, 45 per cent is utilised for refineries, 405 for ammonia production used in fertilisers and other chemical industries, 10 per cent for methanol production used in various chemical industries and remaining 5 per cent in the direct reduced iron (DRI) process for steelmaking.
This distribution has remained almost unchanged globally since 2000 and we can assume similar range of distribution for India’s grey hydrogen demand in the present scenario.
India’s green hydrogen market is currently in the nascent stages of development. This is because the production costs of green hydrogen in the present scenario is 2-3 times expensive than grey hydrogen. However, as the production costs reach parity with grey hydrogen through 2030, as per the announcements by industry leaders, new self-sustaining markets will emerge for green hydrogen thereby accelerating the economy wide net zero emissions. Ammonia production in fertiliser and other chemical industries, ammonia as fuel, large scale renewable
An annual mega initiative by ETEnergyworld to provide a unique platform for leaders to discuss and deliberate upon some of the most pressing issues, challenges, opportunities and trends emerging in the gas sector. energy integration applications in power sector, treatment and production of metals (especially for making green steel) and long-haul transportation applications will be the key Indian markets for green hydrogen through 2030. By leveraging low-cost domestic renewable electricity produced at scale, India could become a regional hub for exporting green hydrogen at competitive prices and command a reasonable share in the global hydrogen demand of 200 million tonnes (Source: IEA) by 2030.
Given this tremendous potential, many leading Indian public sector undertakings (PUS) and private corporations operating in the fossil fuel industry (e.g. oil & gas, thermal power generation etc.) have announced pilot projects including their long term ambitions and goals in the development of green hydrogen production, storage, transportation and end use ecosystem. In the public sector, IOCL has invited expressions of interest from global players for setting up green hydrogen production units at Mathura and Panipat Refineries with installed capacities of 5000 MT per annum & 2000 MT per annum respectively on Build Own Operate (BOO) basis. GAIL has launched a global tender to procure 10-megawatt electrolyser capable of producing 4.5 tonnes of green hydrogen per day.
The Solar Energy Corporation of India (SECI) has invited tenders to set up a green hydrogen pilot plant. Most importantly, a 10 per cent purchase obligation for green hydrogen in refineries and fertiliser plants is awaiting Cabinet approval. In the private sector space, Reliance Industries, as part of its commitment to invest $10 billion (Rs 750 billion) in new energy businesses, announced plans to build a giga-factory to manufacture electrolysers.
Adani group has plans to invest $70 billion in this decade to become the world’s largest renewable energy company and produce the cheapest hydrogen on the Earth. These measures and proposed projects would pave the way for a robust green hydrogen market growth in this decade.
It is said that green hydrogen is also an expensive fuel to move, while it can be stored as ammonia, reconversion is expensive. How can India manoeuvre this?
Despite having high calorific value per unit mass, Hydrogen has one of the lowest volumetric energy densities (i.e. calorific value per unit volume) in its gaseous form at ambient temperature and pressure conditions. This property of hydrogen as an alternative green fuel requires additional infrastructure to compress or liquefy the gas for efficient storage, transportation and end use applications…Read More...