Cost of 'green' hydrogen to fall by over 50% by 2030: TERI report

The cost of "green" hydrogen will reduce by more than 50 per cent by 2030 and it will start competing with hydrogen from fossil fuels, The Energy and Resources Institute (TERI) said in a report released on Wednesday.

"Green" hydrogen is a zero-carbon fuel made by electrolysis, using renewable power from wind and solar to split water into hydrogen and oxygen.

The report, titled "The Potential Role of Hydrogen in India", was prepared under TERI's Energy Transitions Commission (ETC) India programme and launched by Niti Aayog Vice Chairman Dr Rajiv Kumar.

"This is a first-of-its-kind, cross-sector assessment of how hydrogen technologies can support the transition to a zero-carbon energy system in India," said Will Hall, Fellow, TERI, and one of the report authors.

The report said hydrogen needs to be targeted in sectors where direct electrification is not possible.

In the transport sector, battery electric vehicles (BEV) will become competitive across all segments, except for very long-distance, heavy-duty transport, which could be fuelled by hydrogen.

In the industry sector, hydrogen can start competing with fossil fuels in certain applications by 2030.

In the power sector, hydrogen could provide an important source of seasonal storage for variable renewables like solar and wind energy.

Large amounts of seasonal storage will become necessary only when the share of wind and solar in total generation reaches very high levels (60-80 per cent), it said.

Kumar said that the government sees hydrogen as "our next big sunrise sector and a transition to the hydrogen economy is the way forward for India".

He said that improvement in technology and fall in cost of hydrogen will happen sooner than estimated.

Kumar also suggested adding electrolysers to produce hydrogen in the list of industries that are to receive the production linked fiscal incentives recently announced by the government for economic recovery.

Dr Ajay Mathur, Director General, TERI, said, "The falling cost of hydrogen will drive its uptake, with initial scale-up being driven by collaborations between progressive public and private players.'

"India has an opportunity to grow an economically competitive low carbon hydrogen sector that can spur job growth, reduce energy imports, whilst drastically reducing emissions," he said.