While all this sounds very rosy, there are concerns that emissions from grid-connected hydrogen electrolysis might be multiple times worse than conventional ‘grey’ hydrogen produced from fossil fuels.
CHENNAI: India has set its sights on becoming energy-independent by 2047 and achieving Net Zero by 2070. To achieve this target, increasing renewable energy use across all economic spheres is key and green hydrogen is considered a promising alternative for enabling this energy transition. The National Green Hydrogen Mission, which was approved by the Union Cabinet in January 2022, targets the development of at least 5 million metric tonnes (MMT) per annum of green hydrogen production capacity.
While all this sounds very rosy, there are concerns that emissions from grid-connected hydrogen electrolysis might be multiple times worse than conventional ‘grey’ hydrogen produced from fossil fuels.
Bengaluru-based Climate Risk Horizons, which works on systemic risks that climate change poses to investors, lenders and infrastructure investments, released a report titled “Pitfalls & Promise” in which it indicates rush for green hydrogen production might ‘cannibalise’ existing renewable energy supplies.
Green hydrogen is produced by splitting water using electricity. The process is called electrolysis. Ideally, the source of power should be entirely clean energy from new installations. Otherwise, decarbonising India’s grid to reduce emissions will take a back seat. “If existing or already planned renewable energy is diverted to green hydrogen production, then it will delay grid decarbonisation. Due to efficiency losses (which are close to 20-30% as per another global analysis) utilising clean energy for green hydrogen delivers significantly lesser carbon reductions than clean electrification of the grid,” the study report said.
Current scenario
To produce 5 MMT of green hydrogen, 250 TWh of electricity would be needed, which is 13% of India’s current electricity generation. As of August 2023, India’s total renewable capacity (excluding large hydro) stood at 131 GW. The mission envisages adding 125 GW to support hydrogen production. This would be in addition to the existing 500 GW non-fossil target submitted as part of India’s Nationally Determined Contribution under the Paris Agreement. But in FY 2023, India installed only 15 GW of new solar and wind capacity, against the 45 GW per year needed to reach the 2030 target. So, if the electrolysers are run 24x7, they will operate even in non-RE generating periods. Where will the electricity come from? If it comes from India’s coal-powered grid in general, it will in fact increase carbon emissions, since about 70% of the electricity on the grid is coal-generated—more in non-daylight hours when solar generation is nil.
In an office memorandum issued earlier this year, the Ministry of New and Renewable Energy (MNRE) talked about supporting green hydrogen production ‘banked with the grid’ while prescribing 2 kg of carbon dioxide equivalent per kg of hydrogen as the green hydrogen standard for India.
Research in the United States suggests that embodied carbon emissions from “green” hydrogen produced using loose accounting standards would in fact be several times more than those from traditional “grey” hydrogen produced from fossil fuels and drive tens of millions of tonnes of additional emissions into the atmosphere. Given the Indian grid’s higher dependence on coal for electricity, particularly during non-sunlight hours, carbon intensity of “green hydrogen” produced with electricity from the grid will likely be much worse, the study said.
Only 15% disclose source
Only 15% of the green hydrogen production capacity announced so far (2,66,000 metric tonnes per annum from a total of 1.7 million MT/p.a.) have announced renewable energy Power Purchase Agreements (PPAs) or captive RE generation to meet their electricity demand.
The vast majority of projects have not disclosed their source of electricity. It is also not clear if those few projects that have committed to renewable PPAs or captive RE generation intend to meet 100% of their requirement from these sources. Ashish Fernandes, CEO, Climate Risk Horizons said: “It’s essential that the MNRE gets this right. Green Hydrogen has massive potential to reduce carbon emissions from industrial sectors, but only if the accounting methods and safeguards are rigorous. This means it has to be powered 100% by new, additional renewable energy that is matched to consumption on an hourly basis. If the rules have loopholes, either by allowing RE credits or matching consumption with RE generation on a monthly or annual basis, it will not deliver actual carbon reductions. This will undermine the green hydrogen market before it can even get started.”
Counter view: This is the right time
Green hydrogen is seen as the fuel of the future. Especially, to decarbonise hard-to-abate sectors like fertiliser, steel, iron, and petrochemical sectors, this is the only solution. In industry, hydrogen can potentially replace coal and coke in iron and steel production. Steel manufacturing is one of the largest carbon emitters in the world. Decarbonising this sector using hydrogen is expected to have a significant impact on India’s climate goals.
At present, hydrogen produced from natural gas is widely utilised for the production of nitrogenous fertilisers, and petrochemicals. Substituting this with green hydrogen could allow use of renewable energy in these important sectors and reduce import dependence. India’s annual ammonia consumption for fertiliser production is about 15 million tonnes, roughly 15% of this demand (over 2 million tonnes per annum) is currently met from imports. Mandating even 1% green ammonia share is likely to save about 0.4 million standard cubic feet per day of natural gas import. Rahul Walawalkar, founder and president, India Energy Storage Alliance, which actively engaged with MNRE and contributed to formulating Green Hydrogen Mission, told TNIE: “The overall policy is going in the right direction. Only thing is to reduce the cost of manufacturing hydrogen, we need to look at increasing the utilisation of electrolysers by adding wind, solar and storage and get 80% green energy, which is something possible and in active discussion. All the stakeholders are aware of the issues. There is no point in jumping the gun.” He said it is important to build the industry, and manufacturing capacity, and train the industries about how to operate and optimise. The mistakes and delays that happened with solar and battery storage should not be repeated and end up playing the catch-up game.
