By - King Stubb & Kasiva on October 14, 2023
In an era marked by a collective urgency for sustainable energy solutions, India has launched a new initiative to promote green hydrogen production with the introduction of the National Green Hydrogen Mission.[1] This program, led by the Ministry of New and Renewable Energy, is not only a national commitment but also a clarion call to action for the entire world. India positions itself strategically with a significant investment of INR 19,744 crores (USD 2.4 billion), exploiting its vast and cost-effective renewable resources to become a global leader in the production of green hydrogen.[2]
India has emerged as a clear focal point for investors navigating the evolving energy landscape. The mission's primary purpose is nothing short of transformative: to exponentially scale up renewable hydrogen production, with an ambitious goal of at least 5 million tonnes by 2030 and aiming to double exports. With domestic demand for hydrogen in India estimated to reach 11 million tonnes that year, the mission intends to secure a significant 46 per cent share of this demand through innovative policies, hence creating a universe of attractive investment prospects.[3]
In essence, the National Green Hydrogen Mission is more than a strategy for India's long-term sustainability; it is an invitation to investors to be the architects of this transformative journey. This article aims to highlight the investment opportunities in Hydrogen Infrastructure in India in the following manner:
Historically, India has relied on hydrogen for producing fertilizers and a variety of industrial activities. Conventional production methods, on the other hand, have a substantial environmental impact. To solve this issue, a shift to "green hydrogen" is underway, utilizing enhanced electrolyzer technologies fuelled by renewable energy sources, which has the potential to completely remove carbon emissions.
The Indian government is entering the global green hydrogen economy. The National Hydrogen Mission (NHM) aims to build a 5 million-metric-ton green hydrogen generation capacity by 2030. NHM also views India as a key export hub for green hydrogen, with a target of 10% of world import demand, boosting investment and innovation across the whole green hydrogen value chain.[4]
India has the potential to produce significantly more green hydrogen than other nations thanks to its abundant renewable energy resources. This enables India to achieve some of the lowest levelized prices in the world for green hydrogen and green ammonia. Investors should consider investing in electrolyzer manufacturers, renewable energy developers, and storage companies to capitalize on the growing green hydrogen market.
A comprehensive policy framework and strategic initiatives, including the Green Hydrogen Mission[5], guide India’s commitment to energy independence and attaining Net Zero by 2070.
Investments can be anticipated in several areas of India’s hydrogen industry. Some of the key focal points of investment are as follows:
The future of India's hydrogen industry looks promising, thanks to strong industrial demand, smart investments from big players like Reliance and Adani, and government efforts like the National Hydrogen Mission. Due to projected reductions in production costs and the sector's crucial role in decarbonizing large sectors, India is a big participant in the global green hydrogen landscape. As technology breakthroughs and policy frameworks grow, the country is set for a revolutionary shift towards the production of sustainable and competitive green hydrogen.
The government has allocated ₹400 crore up to 2025-26 for the development of Green Hydrogen Hubs and associated projects.
The total investment potential in the green hydrogen value chain is estimated to be around US$23.3 billion. This includes production, storage, transportation, and distribution infrastructure.
The initial outlay for the National Hydrogen Mission in India is ₹19,744 crore. This includes allocations of ₹17,490 crore for the SIGHT program, ₹1,466 crore for pilot projects, ₹400 crore for R&D, and ₹388 crore for other Mission components.
[1] https://www.india.gov.in/spotlight/national-green-hydrogen-mission.
[2] https://mnre.gov.in/img/documents/uploads/file_f-1688557917362.pdf.
[3] https://static.pib.gov.in/WriteReadData/specificdocs/documents/2023/jan/doc2023110150801.pdf.
[4]https://www.india.gov.in/spotlight/national-green-hydrogen-mission#:~:text=The%20mission%20outcomes%20projected%20by,lakh%20crore%20in%20total%20investments.
[5] https://www.india.gov.in/spotlight/national-green-hydrogen-mission.
[6] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1928128.
[7] https://mnre.gov.in/img/documents/uploads/file_f-1673581748609.pdf.
[8] https://mnre.gov.in/img/documents/uploads/file_f-1687963916599.pdf.
[9] https://pib.gov.in/PressReleasePage.aspx?PRID=1937584
[10] https://www.ibef.org/news/india-plans-green-hydrogen-incentives-of-at-least-10-of-cost.
[11] https://www.ibef.org/news/india-plans-green-hydrogen-incentives-of-at-least-10-of-cost.
[12] https://mnre.gov.in/hydrogen_energy_government_of_india.
[13] https://sarepenergy.net/wp-content/uploads/2023/05/GREEN-HYDROGEN-FINAL-Version.pdf.
[14] https://sarepenergy.net/wp-content/uploads/2023/05/GREEN-HYDROGEN-FINAL-Version.pdf.
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