Tuesday's Talking Points
India’s Green Hydrogen journey chugging along!
What’s the Point?
India could become the fifth country to operate Green Hydrogen Trains, with trials expected to commence later this year, according to a statement from a Railway Board Member. For India’s journey towards Net Zero emissions, Green Hydrogen is emerging as a popular choice for enabling greener operations in industries such as iron ore and steel, fertilizers, refining, methanol, and maritime shipping. There have been significant investments to increase renewable energy capacity and incentivisation for the Green Hydrogen ecosystem, the result of which are innovative applications such as Green Hydrogen trains, producing ammonia for various uses, commercial vehicles and other mobility solutions, steel plants, among others. Energy Independence could be a key outcome from Green Hydrogen adoption, substituting fossil fuel imports of ₹1 lakh crore by 2030.
Background
While we have covered the topic in detail in the past, Green Hydrogen is produced by splitting water into hydrogen and oxygen using electricity generated from renewable sources. Global hydrogen demand is currently driven by its use in refining and ammonia (fertilisers). A large part of likely future demand is driven by its use as a heating material in various industries (steel, paper, cement, aluminium, food) and as feedstock in various products such as metallurgy, steel, food, and glass. On combustion, hydrogen turns into water, thereby being non-polluting.
To establish dominance in this new energy commodity, India has been taking steps to promote use of Hydrogen. In 2021, the Prime Minister signalled the launch of the National Green Hydrogen Mission “to make India a Global Hub for Green Hydrogen Production and Export in the Amrit Kaal” and “to make a new progress in the field of energy self-reliance.” Last year, the Cabinet approved the National Green Hydrogen Mission with an outlay of ₹19,744 crore.
Source: India’s Green Hydrogen Revolution, May 2024, (Refer PIB Link). H2 refers to Hydrogen in above illustration.
India’s Green Hydrogen Rail ambitions
India's first hydrogen-powered train is expected to run for trials on the Jind-Sonipat section in Haryana by December 2024. The train will be part of a larger pilot project to retrofit existing diesel locomotives with hydrogen fuel cells. India's hydrogen train project could make it the fifth country in the world to deploy hydrogen-powered trains, along with Germany, France, Sweden, and China.
- Cost: The project is estimated to cost about INR 80 crore ($9.76 million) per train, plus an additional INR 70 crore for the necessary ground infrastructure per route.
- Safety Audit: Indian Railways has partnered with Germany's TUV-SUD to conduct a safety audit for the train.
- Future Plans: Indian Railways plans to run 35 hydrogen trains on heritage and hilly routes. These could help reduce emissions in these regions, and also be cost-effective.
Major projects in India in the Green Hydrogen space
- Export oriented agreements have been inked to export ammonia made with Green Hydrogen to Japan, Norway, among others.
- Mobility sector is seeing significant traction, with refuelling stations for buses being set up in hilly areas such as Kargil and Chamba, and urban areas such as Delhi, Noida, Jorhat. In fact, an Indian PSU Shipyard company has spearheaded development of a hydrogen fuel cell system-based ferry, showcasing applications in the maritime sector as well.
- Steel: An Indian steel company has set up a Green Hydrogen plant in Hisar, that could reduce the company’s emissions by about 2,700 metric tonnes per year.
- Electrolyzer manufacturing: Indian government has awarded contracts for Electrolyser Manufacturing under the SIGHT Scheme were awarded to 8 companies for a capacity of 1,500 MW per annum.
Conclusion
With policy support via the National Green Hydrogen Mission, abundant renewable energy resources, important potential outcomes on energy security and job creation, strong pool of skilled engineers and technicians, increasing manufacturing capacity, geographical advantages such as its long coastline and a reliable power grid infrastructure, and friendly international relations could mean India could emerge as a major player in the Green Hydrogen space.
The development of Green Hydrogen has the potential to reduce India’s reliance on hydrocarbon imports and result in savings on the current account. Over time, we could even see the export of this commodity. As the world increasingly focusses on Net Zero emissions, Hydrogen usage is likely to improve. Being early to scale could have immense benefits for the Indian economy. Challenges remain in terms of scaling the usage and technology behind Hydrogen.
Sources: PIB, Bloomberg, and other publicly available information
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