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Source: DownToEarth

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  • Investing in a homegrown electrolyser manufacturing infrastructure is anticipated to drive down the price of green hydrogen and enhance the nation’s competitive edge.


Current Emission Landscape

  • Major Contributors: Power, steel, cement, and fertilizers collectively account for over half of India's emissions.
  • National Goals: India aims to reduce emission intensity by 45% by 2030 from 2005 levels and achieve Net Zero emissions by 2070.
  • Renewable Energy Targets: In the power sector, India plans to increase renewable energy-based installed capacity to 50% by 2030, which would significantly reduce emissions.

Challenges in Hard-to-Abate Sectors

  • Steel and Fertilizer Sectors: These sectors face challenges in reducing emissions while increasing production due to reliance on conventional fossil fuel-based hydrogen production methods.
  • Need for Alternative Solutions: Exploring alternative avenues to curb emissions in these sectors is imperative to meet emission reduction targets.

Role of Green Hydrogen

  • Traditional Hydrogen Production: Historically, hydrogen production has relied on fossil fuels like natural gas or coal through methods such as steam methane reforming and coal gasification.
  • Green Hydrogen as a Solution: Green hydrogen, sourced from renewable energy like solar, wind, or hydro, offers a transformative alternative to conventional hydrogen production methods.
  • Electrolysis Process: Green hydrogen is produced through electrolysis, where direct current passed through water splits molecules into individual elements, generating hydrogen at the cathode.

Significance of Green Hydrogen

  • Emission Reduction: Green hydrogen production does not involve fossil fuels, resulting in zero carbon emissions.
  • Transformative Potential: Adoption of green hydrogen can revolutionize emission-intensive sectors by providing a clean and sustainable energy source.
  • Contribution to Climate Goals: Utilizing green hydrogen in sectors like steel and fertilizers can significantly reduce emissions, aligning with India's emission reduction targets. 

Current Electrolyser Landscape

  • China's Dominance: China leads in both installed electrolyser capacity and manufacturing, with nearly 220 megawatts as of 2022.
  • Expansion Plans: China has an additional 750 MW under construction, slated for integration by 2023.
  • Global Contribution: China contributes 40% of the global electrolyser manufacturing capacity.

European Union's Growth

  • Surge in Installations: The European Union experienced a surge in installations, with approximately 80 MW added in 2022.
  • Doubling Capacity: This addition doubled the capacity installed in the preceding year, indicating rapid growth in the region.

National Green Hydrogen Mission (NGHM) in India

  • Government Initiative: The Government of India unveiled the NGHM to promote green hydrogen adoption.
  • Substantial Budget: NGHM is backed by a substantial budget of Rs 19,744 crore spanning from 2023-24 to 2029-30.
  • Allocation Breakdown:
    • Rs 17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme.
    • Rs 1,466 crore for pilot projects.
    • Rs 400 crore for research and development endeavors.
    • Rs 388 crore for other essential components of the mission.

Significance of NGHM

  • Accelerating Adoption: NGHM aims to accelerate the adoption of green hydrogen in India.
  • Financial Support: The substantial budget allocation provides financial support for various initiatives under the mission.
  • Strategic Interventions: SIGHT program focuses on strategic interventions to facilitate the transition to green hydrogen.
  • Promoting Research and Development: Allocation for research and development endeavors will drive innovation in green hydrogen technology.

Impact of Homegrown Electrolyser Manufacturing

  • Price Reduction: Investment in domestic electrolyser manufacturing infrastructure is expected to lower the price of green hydrogen.
  • Competitive Edge: Enhancing the nation's competitive edge in green hydrogen production and fostering self-reliance.
  • Remarkable Response to SECI Tender:
    • In July 2023, SECI issued a tender for a 1.5 GW electrolyser manufacturing capacity, witnessing significant interest.
    • 21 firms submitted bids, vying for incentives to establish a cumulative annual capacity of 3.4 GW, surpassing the initial offering.
    • 14 companies expressed interest in developing production facilities for green hydrogen, exceeding the offered capacity.

Challenges and Adaptability of SIGHT Initiative

  • Asia Society Policy Institute's Observations:
    • SIGHT initiative's effectiveness depends on adaptability to diverse needs of startups and established players.
    • Long-term viability requires fine-tuning for sustained investment appeal and project resilience.
  • Consideration for Startups in Tranche-II: Ministry guidelines for Tranche-II bids include provisions for smaller units, encouraging indigenous electrolyser design and manufacturing.

Financial Implications and Solutions

  • Expected Capital Inflow by 2030: Programs are expected to leverage public capital to attract private investment totaling Rs 8 lakh crore by 2030.
  • Strategies for Achieving 5 MMTPA Target:
    • Establishing clear, measurable, and globally accepted standards for green hydrogen production.
    • Creating demand visibility to ensure offtake of planned green hydrogen production.
    • Balancing imports and domestic content requirements for electrolyser and other green hydrogen equipment.

Role of MNRE Guidelines

  • Guidelines for Green Hydrogen-based Steel Production: MNRE guidelines and allocation funds for green hydrogen-based steel production will significantly reduce emissions in the sector.
  • Need for Similar Initiatives: Similar initiatives are required for other hard-to-abate sectors with proven green hydrogen technologies to accelerate emission reduction efforts.

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Q.  Investment in homegrown electrolyser manufacturing infrastructure, coupled with initiatives like SECI's tender and the SIGHT program, is poised to propel India towards its green hydrogen production targets. Comment. (250 words)