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Last Update
12 June 2023
Key Enablers to accelerate hydrogen adaptability in India
Generating the need of hydrogen locally and understanding the feasible adaptability should be the first step for building a robust ecosystem
For any market to be sustainable its significant to first create the demand & learn about its adaptability. Generating the need of hydrogen for the end use industry applications & understanding the feasible adaptability should be the first step for building a robust ecosystem. Feasible adaptability depends upon the scale & magnitude in terms of volume and value of hydrogen used . Identify the right set of opportunity & assured business. The opportunity identification should be clearly defined vis-à-vis timelines, like near term & long term and accordingly the demand created should be targeted. In India, the near-term opportunity shall be developing the potential of low carbon hydrogen & then escalate to green hydrogen.
In simple terms the maturity curve for hydrogen market in India can be (i) in terms of H2 type – from blue to green (ii) in terms of commercial application – a. creating & ramping local market (nearly 85% of the hydrogen produced across the globe is absorbed domestically) and export preparation, b. capitalization on export market, c. Leverage scale to expand key longer- term applications (synfuel and methanol) will bring additional market opportunities in 2035+
In simple terms the maturity curve for hydrogen market in India can be (i) in terms of H2 type – from blue to green (ii) in terms of commercial application – a. creating & ramping local market (nearly 85% of the hydrogen produced across the globe is absorbed domestically) and export preparation, b. capitalization on export market, c. Leverage scale to expand key longer- term applications (synfuel and methanol) will bring additional market opportunities in 2035+
Providing long-term off take agreements (for may be at least above 10-15 years or so) security to the private players shall entice them to invest
To encourage the private players to set up hydrogen production plants, it is quintessential to give them assured off take along with other ease of doing business incentives (like single window clearances, land availability on subsidized rates, tax holidays, other financial/nonfinancial incentives). Providing long-term off take agreements (for may be at least above 10-15 years or so) security to the private players shall entice them to invest. Also, there should be some imperative given on creating government-to-government partnerships at inter state level that could facilitate hydrogen flow between distinct states, further supporting demand uptake in target markets, and could lock in supply agreements. The same exercise can be done to lock international supply agreements.
Nitika Sharma, VP- Corporate Strategy & New Business, of Eninrac Consulting says “To encourage PPP for boosting hydrogen ecosystem in India, developing hydrogen model cities could be one such opportunity. A “hydrogen city creation” project can be announced by the government with PPP development. The government could encourage investments through PPP route for establishing pilot H2 cities by developing green/blue hydrogen development across ports, fuel cell powering buildings , dedicated hydrogen pipelines, filling stations & public vehicles. This project can be in extension to the smart cities or cities have given the status of a smart city/likely to be developed as a smart city should be targeted first. The central aim of the Hydrogen City Creation Project is to enable H2 to be used in daily life, such as in housing and transport etc. Depending upon the feasibility analysis , the plan should include construction of facilities such as – installation of fuel cells in public housing, public offices, and sports and cultural centers, along with H2 filling stations, buses/public transport, cleaning vehicles and pipelines — along with new waste-to-hydrogen and biogas-based H2 production plants etc. For the coastal cities, the plan can include port-based development of hydrogen infra such as construction of a new hydrogen port, blue hydrogen production complexes with H2 pipelines connecting the plant with the port, transport bases and fuel cells that would provide heat and power to port apartment blocks and commercial facilities.”
Creating blending mandates across ammonia, refinery and fertilizer
Creating blending mandates across ammonia, refinery and fertilizer, which would likely kickstart the adoption of green hydrogen (and derivatives) as a replacement for grey hydrogen. Similar steps are being taken globally. For example, in Japan, co-firing of ammonia for power production is under consideration. A market-making mechanism through innovative auctions such as the Hydrogen Global Initiative in the EU could also be considered (like the tenders that India’s Solar Mission launched to spur on renewable demand).
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