New Delhi: India, the third-largest energy consumer globally, is projected to experience a 35% rise in energy demand by 2030, as per a report released. With an energy import bill reaching $185 billion in 2022, the country is shifting gears to meet its net-zero objectives, targeting a production of 5 MMTPA of green hydrogen by the end of this decade.
The report, titled “Green Hydrogen: Enabling Measures Roadmap for Adoption in India,” jointly released by The World Economic Forum and Bain & Company, delves into the strategies for bolstering green hydrogen adoption in India. It asserts that switching to green hydrogen for half of the country’s hydrogen requirements could slash greenhouse gas emissions by 50 million metric tons and curtail its dependency on energy imports.
“With affordable renewable energy, India can attract valuable international trade of green hydrogen derivatives. To boost the country’s export potential, it is crucial to establish recognized standards, improve export infrastructure, and form strategic partnerships” said Sachin Kotak, Partner and a leading member of our Energy and Natural Resources practice, Bain and Company.
“While becoming a leading exporter offers economic advantages, competition is expected with countries like the USA (driven by the Inflation Reduction Act), Australia, Middle East, and South America, owing to their lower production costs,” he added.
The report underscores green hydrogen’s critical role in achieving India’s net-zero target by 2070, emphasizing its importance for energy security and emission reduction in sectors where decarbonization is challenging. Key recommendations include achieving cost-parity with grey hydrogen and incentivizing industries to adopt green hydrogen in the short term, while gradually phasing out carbon-intensive alternatives.
Presently, green hydrogen production in India stands at approximately $4–5/kg, about double the cost of grey hydrogen. The report identifies the reduction of renewable energy and electrolyser costs, along with the development of storage systems, as essential for making green hydrogen economically viable.
In the near term, the report suggests that green hydrogen adoption will likely be concentrated in industrial clusters, advocating for incentives similar to those provided for Special Economic Zones. It also calls for targeted incentives to drive domestic demand, particularly from industries reliant on grey hydrogen, such as refineries and ammonia production.
The report concludes that a collaborative effort involving central and state governments, industry leaders, and academic institutions is paramount for India to forge a sustainable future and establish itself as a leader in the global green hydrogen sector.
