Delhi’s Mission on Green Hydrogen

The government’s National Green Hydrogen Mission (NGHM) aims to develop India into a “global hub for the production, usage and export of Green Hydrogen” and is projected to attract over $129 billion in investments by 2030.

In the pursuit of decarbonising major industries like fertilisers, refineries and methanol production, which rely heavily on non-renewable energy sources, the government has laid out a plan to produce 5 million tonnes of green hydrogen. The initiative is set to add 135 GW of renewable energy capacity while focusing on wind and solar energy.

The mission sets a national goal of 500 GW of renewable annual energy production by 2030. India’s renewable energy capacity increased from 75.52 GW in 2014 to 207.7 GW in 2024, a 175% increase in the past decade.

Union Minister Prahlad Joshi, while addressing RE-Invest (Renewable Energy - Investment Conference) 2024 said that $386 billion has been committed by banks and financial institutions for renewable energy initiatives by 2030 and encouraged investments in the sector.

Addressing the same summit, Prime Minister Narendra Modi said India is on the road to developing 17 cities across the country as solar cities with estimated investments of $2.41 billion.

According to the US International Trade Administration, India’s green hydrogen market is projected to be worth $8 billion by 2030 and $340 billion by 2050. Furthermore, according to NITI Aayog, the think tank policy arm of the Indian government, the electrolyser market could be worth $5 billion by 2030 and $31 billion by 2050.

Government Initiatives and Domestic Ventures

The increasing government support, relatively cheap renewable energy and low labour costs are driving the growth. Centre has also launched more than $2.4 billion worth of incentives in the sector.

Two states, Uttar Pradesh (UP) and Gujarat alone have plans to achieve 7 million tonnes of green hydrogen production. Hence, the UP government has pledged a 40% capital subsidy for green hydrogen projects.

The Indian government has also allotted ₹200 crore ($24.1 million) to be divided equally into building four Hydrogen Valley Innovation Clusters (HVIC) in Kerala, Pune, Jodhpur and Bhubaneswar. India also announced itself as the exclusive European Hydrogen Week 2024 partner to boost its export potential.

Recently, the Kerala government announced its plan to set up a green hydrogen manufacturing unit in Kochi with $2.3 billion in investments. The Agency for New and Renewable Energy Research and Technology (ANERT) will oversee the whole project, with the formation of the Kerala Hydrogen Council and a subsidiary company, Kerala Green Hydrogen Hub.

The Strategic Interventions for Green Hydrogen Transition (SIGHT) programme under NGHM announced $1.57 billion in incentives for setting up green hydrogen production plants producing more than 450,000 metric tonnes per annum. The successful bids included Reliance, Greenko, ACME, HHP Two (Hygenco), Torrent Power, CESC Projects, Welspun, UPL, JSW Neo Energy and Bharat Petroleum.

Similarly, under the SIGHT programme $541 million of incentives for companies to set up 1.5 gigawatts of manufacturing capacity electrolysers (crucial units in the production of green hydrogen). The successful bids in this category were from Reliance Electrolyser Manufacturing, John Cockerill Green Hydrogen Solutions, Jindal India, Ohmium Operations, Advait Infratech, Larsen & Toubro, HomiHydrogen and Adani New Industries.

Gensol Engineering in collaboration with Matrix Gas and Renewable Ltd. has secured the order to establish India’s first green hydrogen valley project. Meanwhile, Jindal Steel & Power (JSPL) and Jindal Renewable Power Private (JRPL) have signed a MoU to invest in green hydrogen production in steelmaking in Odisha. Earlier this year, Asahi India Glass and INOX Air Products entered a 20-year off-take agreement for green hydrogen supply.

Foreign Investments and Joint Ventures

Under the government's existing foreign direct investment (FDI) policy, the renewable energy sector allows up to 100% FDI under the automatic route.

In July 2024, Ohmium, the California-headquartered maker of green hydrogen electrolysers, invested ₹2,000 crore ($240 million) in setting up a factory in Karnataka.

Adani New Industries Ltd (ANIL), a subsidiary of Adani Group, announced, a partnership with TotalEnergies SE of France to invest $50 billion in India over the next decade to produce green hydrogen and create an ecosystem around it. The Adani group also signed a Memorandum of Understanding (MoU) with Maire Technimont Group to develop green hydrogen plants.

Additionally, India’s Bharat Petroleum Corporation and Singaporean power company Sembcorp have agreed to form a joint venture focused on producing green hydrogen and its derivatives.

Future of Green Hydrogen

To reach maximum potential, the nation has to bridge the gap between supply and demand. The government's policies have been effective in attracting investments and inciting innovation. However, scaling up demand will be necessary for further success.

Mandating corporations to use green energy can be an effective way to increase the demand. Currently, there are no mandates for the use of green hydrogen in industries. While the manufacturing landscape looks promising, the adoption of green hydrogen is yet to gain traction.

India is also likely to face competition from African and Latin American countries since there have been major investments in the regions to set up green hydrogen plants.

Spain has also tripled its national green hydrogen (GH2) production capacity target to 12 GW, from earlier decided 4 GW in 2020, as the Iberian nation seeks to become the central player in Europe's GH2 ecosystem.

The export of green hydrogen to Europe will also require companies to comply with the regulations set up by the European Union (EU), which are more than just low carbon emissions. India’s capacity to produce cheap green hydrogen energy would be substantial in determining the future.

The 2024-25 Budget focused heavily on green energy initiatives. With geo-political tensions rising in other regions, India has poised itself to meet the increasing global demand and become a major player in green energy.

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