‘Investments of $180-200 billion in green hydrogen expected in India by 2030’

Green hydrogen has garnered huge interest from policymakers as well as the industry. In an interview with DH’s Gyanendra Keshri, EY India Partner Kapil Bansal, who specialises in energy transition and decarbonisation, talks about economic viability, opportunities, and challenges in the green hydrogen sector.

Excerpt:

How do you see the commercial viability of green hydrogen?

The economic viability of green hydrogen production would depend on a variety of factors including renewables costs, electrolyser capex, regulations, and incentives among others. Given the current prices of round-the-clock renewable energy, the levelised cost of green hydrogen production could range from $3.5-$6 per kg. Given that hydrogen that is produced from fossil fuels is substantially cheaper currently; policy measures announced by the government focussing on creating a robust hydrogen supply chain infrastructure, incentivising domestic manufacturing of electrolysers, and reducing green hydrogen costs is expected to further enhance the cost-competitiveness of green hydrogen supply.

How much investments and output growth are projected in the sector?

Given the plans announced by private players and participants, investments of around $180-$200 billion are expected in the green hydrogen space in India in the run-up to 2030. The projected 5 MMTPA (million metric tonnes per annum) of green hydrogen output, as per the national green hydrogen mission, would involve an investment of close to $100 billion. This is also further expected to be supplemented by ecosystem upgradation in terms of infrastructure for transport/storage, port upgradation for export as well as growth in renewables.

Where will the money come from?

These investments will come from different sources. It will be a mix of private equity and government incentives. Private as well as public enterprises, especially refineries and fertiliser companies are expected to boost investments in green hydrogen as part of their decarbonisation journey.

How dependent is the viability of green hydrogen on governments’ support?

Once the technology matures and scale comes, the cost will decline. Before that happens, something very similar to what happened in the solar industry is required to be done for the green hydrogen sector too. The government has provided a lot of support through different schemes to the solar industry. I see similar incentive schemes coming for the green hydrogen sector both by the central and the state governments. At the same time, with technological advancement the cost will come down gradually, making green hydrogen commercially viable even without government incentives.