Green hydrogen auctions, purchase obligations in the offing

Green hydrogen auctions, purchase obligations in the offing

Apart from industrial use, hydrogen technology can also be used to store electricity and potentially to run vehicles.

The government is planning to use 2,000 mega-watt (MW) solar and wind power capacity for hydrogen production. It will also hold green hydrogen auctions as part of a broader plan to curb greenhouse gas emissions.

Apart from industrial use, hydrogen technology can also be used to store electricity and potentially to run vehicles.

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Sources said plans were also afoot to make it mandatory for user industries like fertilisers and petroleum refineries to purchase 10% of their hydrogen requirements from domestic green hydrogen sources.

The country currently consumes about 5-6 million tonne of hydrogen annually. The Union ministry of new and renewable energy (MNRE) is currently charting the ‘National Hydrogen Energy Mission’ to create a hydrogen value-chain in the country and bring down the costs of hydrogen production.

Solar and wind plants can produce green hydrogen through electrolysis, a process wherein the electricity generated is put in water to create hydrogen and oxygen. However, given the current high costs and lack of supporting infrastructure, experts noted that the government has to overcome a number to challenges to build a sustainable eco-system for this new form of energy.

Analysts, however, point out that mandatory green hydrogen purchase could be a burden on the user industries. For example, imported ammonia now costs about $327 per tonne, while ammonia produced from green hydrogen may cost around $600 per tonne for fertiliser plants. “The government should conduct a detailed study on the impact of mandatory green hydrogen purchase obligations for various types of industries,” Somesh Kumar, national leader – power and utilities at EY India, told FE.

“The hydrogen mission document to be released son will provide clarity on the government’s target on long-term production of green hydrogen, priority sectors and fiscal and non-fiscal support, and will also help in understanding how much renewable energy capacity will be needed for green hydrogen output,” said Hemant Mallya, senior programme lead at the Council on Energy, Environment and Water (CEEW).

“We should be looking at niche applications such as sustainable aviation fuels from green hydrogen where the market, mostly international, is able to absorb the premium costs,” Mallya stated, adding that “With the rising pressure to reduce greenhouse gas emissions on developed countries, export markets such Japan and Korea, where renewable energy resources are limited, can be early markets for green hydrogen offtake”.

State-run power generator NTPC has signed an MoU with Siemens for production of green hydrogen from the company’s renewable energy plants. Indian Oil Corporation is also in the process of setting up a one tonne per day capacity pilot hydrogen production plants, and operate 15 hydrogen fuel cell buses in Delhi NCR region. Reliance Industries has said it will build full stack electrolyser and fuel cell solutions in India which will be required to run hydrogen fuel celled vehicles.

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