India’s Tryst With The Promise Of A Hydrogen-Fuel Economy

Livemint     8th September 2021     Save    
QEP Pocket Notes

Context: In his Independence Day speech, the Prime Minister announced five key initiatives, the first being Mission Hydrogen. It holds significant potential in leading future energy transitions. 

Significance of Mission Hydrogen

  • Transforming India from an energy-deficient to an energy-rich country: Even a net exporter of energy.
    • Significant import bill savings potential as India spends $160 billion importing fossil fuel products.
    • Significant economic potential in the wake of emerging high carbon taxes, of which a major ‘adjustment import tax’ has already been announced by the European Union (EU).
  • Hydrogen is considered one of the most sustainable fuels of the future: It is expected that 22% of global energy need by 2050 could be hydrogen-based.
    • Key role in decarbonization: As burning hydrogen produces only water vapour, with no residue or climate-harming impact, and it finds application in a variety of industries such as transportation, including trucks, buses, cars and rail, as feedstock for fertilizers etc.
    • Green hydrogen: It uses zero-carbon footprint (with solar or wind) energy sources for electrolysis in the production of hydrogen from water.
    • India is blessed with all-year sunshine. Solar-to-hydrogen also solves an intermittence problem, as hydrogen substitutes the need for battery storage.
    • Hydrogen fuel cells will be a crucial complement to batteries in this decarbonization journey.
  • A snowball phenomenon in hydrogen is possible: As per the McKinsey report, in the past two years, 70 gigawatts of electrolyzer capacity projects have been announced. This represents a 20-fold rise.
    • This kind of momentum and scale would mean that capital costs per kilowatt for electrolyzers could drop by 65% (That is, below $2 per kg in 10 years).
    • Inspiring examples: India leapfrogged financial inclusion through Jan Dhan Yojana and the adoption of LEDs (annual sales of 5 million LED bulbs in 2014 to 670 million in 2018). 

Way forward: Building a hydrogen economy and freeing India of foreign dependence for energy and fertilizer feedstock would be the ultimate symbol of Atmanirbhar Bharat.

  • The need of the hour is an enabling policy framework, a nudge to increase demand and accelerated infrastructure development, such as pipeline networks and last-mile connectivity
  • Adopt proven business models like Master Limited Partnerships, which are common in the West and allow private capital to participate in the scaling-up effort.
QEP Pocket Notes