In the UN Climate Summit in Egypt, the Green Hydrogen and its role in decarbonizing economies was discussed widely. Global Warming issue became important point of discussion in Climate Summits in the last two decades. You may remember how developed countries blamed India and China for their Carbon Emission in the past decade. Both the countries decided to act on the Carbon Footprint problem and we have reached to a level where South Asian countries may lead world in creating Carbon-Emission free Globe. India particularly did really well in Solar and Wind energy in last 10 years and has shifted remarkably from Fossil Fuels to Renewable Energy in many sectors.
In his Independence Speech on 15th August 2021, Prime Minister Narendra Modi launched National Hydrogen Mission which will aim to make India Green Hub and achieve climate targets. Green Hydrogen Policy was framed accordingly which will focus on capping global warming levels to 1.5 deg. centigrade higher than pre-industrial levels at maximum. India is now creating Three Hydrogen Corridors in our country, supporting corporates and entrepreneurs in fund raising for such projects and promoting domestic use and export of green hydrogen. To create hydrogen ecosystems big billionaires in India like Mukesh Ambani and Gautam Adani have already announced investments worth billions in Green Hydrogen based projects. India has determined to increase annual production capacity of green hydrogen to 25 Million tonnes by 2047.
What is Green Hydrogen?
Hydrogen demand in the world is more than 70 million tonnes per year. In India alone 7 Mt Hydrogen was used in the year 2020. The Hydrogen demand is expected to grow to 11 Mt by 203o. Currenly Blue and Grey Hydrogen are rampantly produced and used in India. Only 0.03% of Hydrogen is prepared using Electrolysis of Water. This hydrogen given 3 times higher energy than any other fuel and as it is prepared using renewable energy like Wind and Solar, it doesn’t have any carbon emission. Hence the name ‘Green Hydrogen’.
In the UN Climate summit of Egypt, India has announced long term low emission development strategy, that will focus on climate justice, equity and sustainable lifestyle. The strategy will ensure increased use of green hydrogen in hard-to-abate sectors like steel, fertilizers, refining etc. India also announced that it will reduce its dependence on fossil fuels in long term and make India green hydrogen hub.
India is dependent on fossil fuels for 70% of its energy. Primary consumption of energy in India is dominated by Coal. It accounts for 55% of India’s energy needs. India fulfills 85% of it’s crude oil requirement by importing from foreign countries. India is the third biggest importer and consumer of crude oil in the world. Being second largest populated country, the needs of Fossil Fuel will only increase in the future. Therefore India wants to focus on alternate energy sources for meeting its energy needs.
Green Hydrogen Production in India:
By 2050, India is determined to make three-fouth of Hydrogen production to be green. Green hydrogen is produced in some of the pilot plants in India using Electrolysis method. Water molecules are broken into H2 and O2 molecules using electricity generated by renewable energy sources. O2 cylinders are sent to industries and hospitals etc. while Hydrogen is liquified in Green Ammonia form and filled in cylinders before transporting to required industries.
Problems in the large scale production of green hydrogen:
The cost of green hydrogen is between $3 to $ 5 per Kg, which is the major barrier in widespread adaptation of Green Hydrogen. World is improving technologies, focusing on large scale production and other solutions to cut it down to $ 1 per Kg in future. As adaption is low, demand is low. Hence large scale production in India is not viable currently. Electrolysers used for splitting water are very expensive too. These are some bottlenecks of green hydrogen production.
Company’s that are producing green Hydrogen in India:
Developing nations have realized the opportunity of Green Hydrogen in fulfilling the energy needs of world post Russia-Ukraine war. India too have devised NGH policy to tap the potential market. Reliance, Adani Enterprises, IOC, GAIL, NTPC,BPCL, L&T etc. companies have started producing Green Hydrogen in India. They have their plans ready to increase the production capacity rapidly.
This was introductory post about Green Hydrogen in India. I will surely do more detailed analysis of Green Hydrogen Plans of these companies and how they will get benefited by it in future on my blog. Thank you for reading this post. Stay connected.
Disclaimer: Stocksbaazigar Mr. Deepak Doddamani is not a SEBI registered advisor. He is NSE’s Certified investment analysis professional, NSE’s Certified Marketing Professional Level -4, AP at IIFL Securities. He has 10+ years of experience in the share market and have traded more than Rs. 75 Cr volume single-handedly. This post is for educational purpose. Please consult your financial advisors before investing in any of the companies mentioned in the post. Stocksbaazigar is not responsible for your Profit/Losses.