At this juncture, with calibrated approach, India can uniquely position itself to take advantage with increasing investment in Hydrogen R&D, capacity building, compatible legislation, and the opportunity for creation of demand among its vast population.
“Energy transition is underway at an exceptional level and several countries are betting on hydrogen to emerge as the top clean fuel with its high energy density and versatility. Government of India’s (GOI) National Hydrogen Energy Mission (NHM) initiative will capitalise on one of the most abundant elements on earth for cleaner alternative fuel option.” [1]
Undoubtedly, Hydrogen is the fuel of the future, however it is imperative to note that it is not the production of hydrogen which is the challenge, but the production of green hydrogen. The usage of hydrogen will not only help us in achieving our emissions goals under the Paris Agreement, but will also reduce import dependency on fossil fuels.
Hydrogen is primarily used in petrochemicals and fertiliser industry and is produced largely from natural gas, thereby emitting enormous amounts of carbon dioxide. Depending on the nature of the method of its extraction, hydrogen is categorised into three categories, namely, grey, blue and green. There is growing focus on increasing production of green and blue hydrogen due to its no carbon emission and use of carbon offset technology, respectively. Additionally, several leading organizations are exploring technologies which can convert bio and plastic waste into hydrogen [2], thereby providing a huge scope for investment in this technology which can combat India’s twin problems of waste management and energy security.
Recently, the Finance Minister in the Union budget for 2020-21 formally announced the NHM which aims for generation of hydrogen from green power resources. The Ministry of New and Renewable Energy (MNRE) has also disclosed that the draft regulations for NHM will be finalised by the end of this month and will thereafter proceed for approval of the Union Cabinet [3]. Though it is speculated that NHM will emphasize on generating green hydrogen and enabling its commercial use as a transportation fuel, however, it is yet to be seen what roadmap the government has envisioned in its draft regulations.
Asia-Pacific stance
Several countries in Asia-Pacific sub-continent, including the likes of Japan and South Korea are on the front foot in terms of hydrogen policy making. In 2017, Japan formulated the Basic Hydrogen Strategy which sets out the country’s action plan till 2030, including the establishment of an international supply chain. It has also entered into memorandums agreeing to cooperation on the exchange of information and personnel and developing technology with countries like New Zealand [4]. Likewise, South Korea is operating hydrogen projects and hydrogen fuel cell production units under the auspices of its Hydrogen Economy Development and Safe Management of Hydrogen Act, 2020, but initially the country faced a lot of issues due to policy vacuum as hydrogen projects were already underway and the implementation policy was rolled out much later. Furthermore, making the first move, South Korea recently passed the Economic Promotion and Safety Control of Hydrogen Act, which deals with three key areas – hydrogen vehicles, charging stations and fuel cells. This law is intended to bring transparency to the nation’s hydrogen pricing system [5].
Indian Context
India has a huge edge in green hydrogen production owing to its favorable geographic conditions and presence of abundant natural elements. The government has given impetus in scaling up the gas pipeline infrastructure across the length and breadth of the country, and has introduced reforms for the power grid, including the introduction of smart grids. Such steps are being taken to effectively integrate renewable energy in the present energy mix. With appropriate capacity addition to renewable power generation, storage and transmission, producing green hydrogen in India can become cost effective which will not only guarantee energy security, but also ensure self-sufficiency gradually.
Policy Challenges
One of the colossal challenges faced by the industry for using hydrogen commercially is the economic sustainability of extracting green or blue hydrogen. The technology used in production and use of hydrogen like carbon capture and storage (CCS) and hydrogen fuel cell technology are at nascent stage and is expensive which in turn increases the cost of production of hydrogen. Furthermore, the maintenance costs for fuel cells post-completion of a plant can be costly, like in South Korea [6].
The commercial usage of hydrogen as a fuel and in industries requires mammoth investment in R&D of such technology and infrastructure for production, storage, transportation and demand creation for hydrogen. Although, the draft regulations of NHM are expected to contain details pertaining to hydrogen technology, including storage, R&D, pilot projects, and other specification and safety standards.
Going Forward
The NHM should aim to establish appropriate physical infrastructure and legal framework for the usage of hydrogen. The industry has already revealed its hydrogen project with Indian Oil Corporation Limited (IOCL) announcing setting up of pilot hydrogen production units [7]. Energy PSU NTPC too is considering setting up a green hydrogen production facility in Andhra Pradesh, and private sector behemoth RIL too intends to replace conventional transportation fuels with hydrogen and clean electricity in a steady phase [8]. To head start the NHM and its smooth approach, there is an imminent need to plug in the policy vacuum by bringing in the regulations as soon as possible.
Currently, multiple regulatory authorities regulate hydrogen use tangentially, for instance, Ministry of Road Transport and Highways regulates vehicle’s fuel carrier specification, MNRE regulates renewable energy sources, Petroleum and Natural Gas Regulatory Board regulates pipelines and Petroleum and Explosives Safety Organisation regulates explosive substances, storage and fuel station’s specifications. Hydrogen being a versatile resource which can be used as a transport fuel, generate electricity, can be transported via pipelines and is highly flammable. The commercial use will require coordination among the various ministries and regulators. The NHM can also highlight the need for global cooperation and generate opportunities for exchange of technology.
The draft regulations for NHM shall have a roadmap for targets and capacity installation. Designated hydrogen hubs can be established to attract investment by providing infrastructural support like pipelines and renewable electricity for production, storage and transportation of green hydrogen. Producers and major users of hydrogen can be placed in these hubs for logistical convenience. A “Hydrogen Valley Platform” to create an integrated hydrogen ecosystem which will cover the production, storage, distribution and end-use is in the works under the Department of Science and Technology [9]. To augment the NHM, constructive synergies among leading industries from different sectors like automobiles, power generation, refining, chemicals is necessary. Countries like Germany are already using alliance which aims to put up 400 hydrogen fueling stations by 2023. Similarly, market leaders in India may consider following a similar strategy to invest in hydrogen related technologies and infrastructure. Not only it will benefit India in reducing emissions but will also benefit the companies in achieving their net emissions goals [10].
Source : economictimes
