The National Green Hydrogen Mission adopted by the Indian government in January is a major policy initiative, and it is a sign of the poverty of Indian politics that it remains so election-obsessed that has not been subjected to the public debate it deserves.
The absence of any critical evaluation by India’s opposition parties of this initiative, which has major implications for India’s development path, is staggering.
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| Student climate protesters in Delhi, 2019. Photo by Vikas Choudhary |
The Indian government is poised to offer energy companies subsidies to set up hydrogen “hubs” – but how this fits with climate policy and social justice goals remains unexplained.
As part of the Hydrogen Mission, companies such as Reliance and Indian Oil will be invited to bid for cash from a 20,000 crore rupee ($2.4 billion) fund.
There will also be money for manufacturing electrolysers, needed to make “green” hydrogen, and subsidies for fertiliser and steel makers to buy it.
But the Hydrogen Mission has been surrounded by hype that raises unjustified expectations.
Prabhat Kumar, an external affairs ministry official, claimed recently that hydrogen could be “our main source of energy in future”. But that will never happen.
Even if the government meets its ambitious target of producing 10 million tonnes of “green” hydrogen each year, that would still only provide about one-fifteenth of the energy that India gets from coal.
The very idea that India will become a major exporter of hydrogen, which runs through all the government’s documents, is questionable.
India may need 6 million tonnes/year of “green” hydrogen to displace the “grey” hydrogen it uses now, for fertiliser manufacture and in oil refineries.
Ending the use of “grey” hydrogen is a priority: it is a global warming nightmare, as for each tonne manufactured, between 10 and 18 tonnes of carbon dioxide are released into the atmosphere.
Before exporting hydrogen, India should also weigh up whether it can be used to displace some of the 160 million tonnes of coal, and more than 30 billion cubic metres of gas, that it imports annually.
The government’s emphasis on “green” hydrogen, rather than “grey”, is welcome. “Green” hydrogen is made by electrolysis – feeding an electric current, produced from renewables such as wind or solar power, into water. There are no direct greenhouse gas emissions but the process requires huge amounts of electricity and water.
We believe that public discussion is urgently needed – about the comparative costs of hydrogen and the burden on resources, and about whether investing in hydrogen will help or hinder climate policies and tackling social inequality.
On costs, the Ministry of New and Renewable Energy asserts confidently that “green” hydrogen will be cost-competitive with “grey” hydrogen by as early as 2026.
This is risky. “Green” hydrogen now costs $3-$8/kilo, compared to $0.80-$1.70/kilo for “grey” hydrogen. The International Energy Agency projects that the cost of “green” hydrogen could fall to $1.40-$3.20/kilo, but only by 2050.
The International Renewable Energy Agency is more optimistic, and reckons green hydrogen costs “could” (not “will”) fall below $2/kilo by 2030 – while CRU, the commodity markets analysts, say they do not expect “green” hydrogen to be available for less than $3/kilo, even in 2050.
Markets have failed many times to bring about the economic shifts needed to tackle climate change, and the danger is that they will fail once again.
As for resources, the renewable energy ministry claims that India can supply “abundant” electricity from renewables. But energy researchers urge caution.
Scholars at the Florence School of Regulation estimate that to implement the National Hydrogen Mission, India would need 50 billion litres/year of demineralised water supply – and several parts of India are “already severely water-stressed”.
Analysts at the Energy and Resources Institute caution that shortage of unused land will frustrate solar and wind capacity construction.
Manufacture of electrolysers is also a bottleneck. Now, all the world’s manufacturers are turning out 8 GW of electrolysers each year. To reach the government’s targets, India could need 12 years’ worth of current world supply, and its own electrolyser production capacity right now is negligible.
Many of these obstacles may be overcome, even if not at the speed that officials suggest.
But there is a more fundamental question: to contribute to averting dangerous climate change, should India prioritise hydrogen, or use its renewable electricity to displace coal consumption?
The Hydrogen Mission aims to produce 5 million tonnes/year of “green” hydrogen by 2030 – which would need about 120-125 GW of renewable electricity generation capacity. That means doubling the amount of electricity India gets from solar panels and wind farms.
But that electricity could be fed into the electricity grid, which would allow India to retire 30 or 40 large (1.5 GW) coal-fired power stations. Coal burning and coal imports could be cut, helping to deal with the global warming threat and air pollution.
An authoritative report by the Energy and Resources Institute points out:
Hydrogen production from renewables is an energy-intensive process, and direct electrification should always be preferred wherever possible.
That is because, if you use 10 units of energy (as electricity) to make hydrogen, the hydrogen you produce only contains 7 units of energy. If you compress it and transport it, you use up another 3 units. So it is always more energy-efficient to use the electricity directly, than to turn it into hydrogen.
Despite such expert opinion, the government is offering hydrogen producers preferential terms, including a waiver of inter-state transmission charges, on which to buy electricity.
This amounts to a privileged carve-out for the industries that use hydrogen – while the electricity’s sectors problems, including debts, carbon-wasteful inefficiency, and patchy access, remain.
The fight to forestall dangerous climate change must go hand-in-hand with policies that address social inequality. But there is little evidence of this in the government’s approach.
On the contrary, the National Hydrogen Mission dovetails with the business plans of India’s most powerful companies, carrying the danger that the poorest sections of society will be left still further behind energy-wise.
India’s hydrogen enthusiasts include Reliance Industries, who are considering investing in hydrogen production in Australia, and Indian Oil, who say that only half the hydrogen it makes over the next decade will be “green”.
Adani last year announced a $50 billion hydrogen development project in partnership with TotalEnergies, the French oil and gas company. But in the wake of Adani’s recent crisis, TotalEnergies pulled out, and now Adani has too.
For hydrogen to be used to meet climate and development goals, these issues need addressing. Otherwise, it could turn into expensive greenwash for energy companies, that in turn postpones the action needed to move away from fossil fuels.
⏺ This article first appeared in The Tribune (India) on 10 April. Pritam Singh is Professor Emeritus in Economics at Oxford Brookes Business School, Oxford, UK. Simon Pirani is author of Burning Up: A Global History of Fossil Fuel Consumption (Pluto Press, 2018), and writes this blog
⏺ Rhetoric aside, India must find answers to these seven critical questions on green hydrogen – The Wire.
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