India needs to form Green Hydrogen Corridors: NITI Aayog

Other News Materials 30 June 2022 09:52 (UTC +04:00)
India needs to form Green Hydrogen Corridors: NITI Aayog

Government think-tank NITI Aayog on Wednesday suggested a production-linked incentive (PLI) scheme for electrolyser and fuel cells, two crucial components for the development of the domestic green hydrogen industry. The cumulative value of the green hydrogen market in the country could be $8 billion by 2030 and $340 billion by 2050, it said.

While India consumes around 6 million tonne (MT) of hydrogen annually mostly from ammonia plants and refineries; the consumption might go up 5-10 times led by demand from heavy-duty trucking and steel sectors by 2050.

Green hydrogen comprises a negligible part of the total consumption now. A vibrant green hydrogen market can lead to a reduction in India’s energy import bill which is currently pegged at over $160 billion and its decarbonisation target.

The think-tank, in a report on “harnessing green hydrogen – opportunities for deep decarbonisation in India”, said with proper policy and fiscal support and taking advantage of the low-cost renewable energy, almost 94% of the hydrogen demand in the country can be met by green hydrogen by 2050, up from 16% in 2030.

“This translates to an implied cumulative electrolyser capacity demand of 20 GW by 2030 and 226 GW by 2050, promising a sizeable opportunity for indigenous manufacturing. Electrolyser market size could be approximately $5 billion by 2030 and $31 billion by 2050,” it said.

While a target-backed government incentive can greatly accelerate manufacturing, it said, “investment in larger equipment, advancement in manufacturing operations, better utilisation of machinery and aggregated procurement are the biggest factors to reduce manufacturing costs related to fuel cells.”

Manufacturing costs dominate the total cost of fuel cells, whereas the share of materials cost is much lower. An increased scale in production can bring the manufacturing costs down dramatically. RMI, an independent think-tank that supports India’s clean energy transition, estimates that fuel cell demand through heavy-duty trucking alone presents a $4 billion market opportunity by 2050 in India.