The Aakhya Weekly #30 | Transitioning to Green Hydrogen
The Aakhya Weekly #30 | Transitioning to Green Hydrogen
In Focus: Green Hydrogen: Fueling the future
On 4th January, 2023, the Union Cabinet approved the National Green Hydrogen mission. The initial budgetary outlay for the mission is Rs.19,744 crore ($2.1 billion USD), with the bulk of the funding earmarked for “strategic interventions” in the sector, as well as funding for pilot projects, R&D, and other mission components. The mission aims to develop green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum by the year 2030, which will require an associated renewable energy capacity addition of about 125 GW. This truly is a “quantum leap” in terms of moving the needle on green hydrogen, as the total installed renewable capacity in India (excluding hydro) currently stands at just under 115 GW.
If successful, India will become the leading producer and supplier of green hydrogen in the world, providing opportunities for export of green hydrogen and its derivatives while reducing the country’s dependence on imported fossil fuels. According to the government, the mission is expected to bring Rs. 8 lakh crores in terms of investments and create up to 6 lakh jobs. The policy is initially targeting industries comprising most industrial demand of hydrogen such as fertilizers, refining, iron and steel, and bulk chemicals.
The ideal energy supply system comprises three elements - energy should be cheap (affordable), green (sustainable), and secure (uninterrupted). Fossil fuel backed generation is cheap and secure, but not green, while renewable energy-backed generation, while green (and relatively affordable), is intermittent. The lack of economic, utility-scale storage options remain the biggest hurdle to widespread renewable deployment. In India, when the sun doesn’t shine and the wind doesn’t blow, it is good old coal fired generation that fills the gap left by renewables to meet demand. In the decades ahead, India has to tread the fine line of providing affordable and uninterrupted power supply to meet its growing demands, while also being conscious of the emissions generated by traditional generation in order to meet its net zero by 2070 ambition.
The idea of hydrogen as a source of power is not new. Hydrogen can be made from water, used as a store of energy, and when combusted to release energy, turns into water. When produced from energy from renewable sources, it can play a part in the desired energy supply trifecta. However, there’s a catch. Green hydrogen, as things stand, is entirely economically unviable.
Electrolysis is incredibly energy intensive, which means you need an overbuild out of renewable energy to produce hydrogen, and due to the size and flammability of the molecule, the associated infrastructure is also incredibly capital intensive. The rarely explored hydrogen economy between hydrogen production and end use consists of infrastructure for packaging (compression, liquefaction, hydrides), distribution (pipelines, road, rail, ship), storage (pressure & cryogenic containers) and then transfer to the end user. While these demands might sound akin to the natural gas fired economy, because the Hydrogen molecule is smaller and simpler, the infrastructure required to store and transport it is much more energy-intensive than a natural gas economy.
The opportunity for India here is to meet the demands of the West. The energy transition to a zero emissions energy supply future envisioned by developed countries leads to economies powered by renewable energy and green hydrogen. As consensus on solutions to combat anthropogenic climate change develops, inevitable global demand for green hydrogen makes it an attractive investment for India. So certain is the demand in the future that both Mukesh Ambani and Gautam Adani have committed billions of dollars to green hydrogen production.
Since the official release of the policy, the government has hinted at the next steps for the development of a hydrogen economy in India. It intends to roll out a PLI scheme, providing subsidies for setting up green hydrogen manufacturing and utilisation hubs, fertiliser and steel plants based on the fuel, and factories for making electrolysers. You can read more about the mission here, the previously released green hydrogen/green ammonia Policy here, and find recent commentary here and here.
Tracking the G20
Collaboration between the G-20 under India’s presidency and the G-7 under Japan’s presidency presents an excellent opportunity for both countries to move closer towards vasudhaiva kutumbakam, said MoEFCC Minister Bhupender Yadav in a bilateral meet with his Japanese counterpart Akihiro Nishimura. As reported in Mint, he said: “India and Japan may explore strengthening bilateral cooperation especially on circular economy and resource efficiency, low carbon technology, green hydrogen among others… The need of the hour is to orient industrial development towards sustainable production and to be a tool for nudging [sic] sustainable consumption.”
Pavan K Varma, writing for News18, opines on the vital opportunity that the G-20 Summit provides for India to display its soft power. He says: “[a] civilisation that has so much to offer in terms of the richness of its cultural artefacts and the profundity of its spirituality and philosophy, must seriously broad base its cultural projection. In doing this, the stage is past when we relied mostly on periodic cultural performances and exhibitions to showcase our heritage. The time has come to explain to the world, in an organised, planned and sustained thrust, the amount of cerebral energy that has for millennia gone into the unique tradition of our music, dance, sculpture, architecture, painting, literature, theatre, textiles, and myriad forms of craftsmanship. We need to explain the deep philosophy and thought underlying our entire spectrum of artistic endeavours, and the fact that India was the first civilisation to develop the science of aesthetics, rasa, on which there is an entire chapter in Bharat’s Natya Shastra, written in 200 BCE. Performance and explication must go together, including through short films, competent guides and lecture-demonstrations, to take the appreciation of our soft power beyond exotica to genuine respect.”
Top Stories of the Week
Kerala HC refuses to stay TRAI’s amended NTO
The Kerala High Court has refused to stay the amendment order issued by the Telecom Regulatory Authority of India (TRAI) which demands a change in broadcasting tariffs. The application was filed by the All India Digital Cable Federation.
The amendment order comes into effect from 1 February 2023. In the new order, the TRAI has removed the twin conditions, and reinstated the price cap per channel to Rs. 19. However, the High Court said that it was not inclined to issue interim orders. The Court accepted the submission of the TRAI's counsel that the amendment order was issued after a proper consultation process and that no prejudice would be caused to the Federation with the implementation of the order.
The High Court further noted that the amendment order was issued in the public interest and that it was the duty of the TRAI to ensure that the broadcasting sector was regulated in a manner that was fair to all stakeholders - consumers, cable operators, broadcasters and so on. Readers will recall that the TRAI had conducted an extensive consultation process on the issue of broadcasting tariffs back in September 2022, following which it had issued the amendment order.
Gujarat launches e-VEG, a one-of-a-kind web portal for EVs
On 10th January 2023, a roadmap for the phased implementation of the electric vehicle policy in Ahmedabad and a web portal for Electrification of Vehicles in Gujarat (e-VEG) were launched under the aegis of the ‘UK - NITI Aayog - Gujarat knowledge exchange programme’. The release took place through a collaboration between the Gujarat government and the British High Commission led by Harsh Sanghavi, Minister of State for Transport, Gujarat and Alex Ellis, the British High Commissioner to India respectively.
The e-VEG portal has been developed based on international best practices, including learnings, particularly from the United Kingdom. It is aimed at helping users and businesses switch to electric vehicles by providing information on available resources such as charging points, and guidance on the latest policies and regulations. This is expected to streamline the process of availing government subsidies and expedite the adoption of electric vehicles in the state through a single site.
The British High Commission is undertaking a similar initiative in Karnataka, likely to expand to other Indian states in the near future.
This Week in Policy
Economy and Taxation
Despite a dismal outlook for the global economy, the World Bank has projected that India’s GDP shall grow by 6.6% in Fiscal 2024, slowing down slightly from its projected 6.9% growth in Fiscal 2023. The IMF holds a similarly buoyant view of the Indian economy, predicting 6.1% growth in Fiscal 2024, falling from 6.8% in Fiscal 2023. Meanwhile, the advanced estimates of the NSO predict that India’s economy shall grow by 7% in Fiscal 2023.
Agriculture and FMCG
Guyana has offered 200 acres of land to India for cultivation and production of millets and has also asked for a team of experts to assist in the setting up of millet farms.
Wheat production in India is projected to jump to record levels in 2023, which might prompt India to lift export bans.
Healthcare
India’s agenda for healthcare under its G20 presidency shall include (a) improving preparation for future pandemics, (b) improving digital public goods for healthcare, and (c) strengthening cooperation between countries for better research, announced Health Minister Sri Mansukh Mandaviya.
The Health Ministry has put out a draft of the National Medical Commission (Amendment) Bill, 2022. The Bill looks to permit patients to lodge appeals before the Ethics and Medical Registration Board or National Medical Commission against orders and actions of state medical commissions.
Foreign affairs
The MEA and ISRO are looking to collaborate with emerging nations in Africa, the Middle East, and Central and South America in the space sector.
External Affairs Minister S Jaishankar, addressing the 17th Pravasi Bharatiya Divas Convention, lauded the contributions and achievements of the Indian diaspora around the world.
Technology, Media and Telecommunications
The National Physical Laboratory (NPL) in collaboration with ISRO is looking to develop infrastructure to ensure synchronisation of all computers and telecom services in India as per Indian Standard Time.
The Government is looking to dissolve the Digital Communications Commission (DCC), which is the highest decision-making body in the Department of Telecommunications.
International trade and commerce
Union Ministers Ashwini Vaishnaw (MeitY) and Smriti Irani (Woman and Child Development) will be leading India’s team of representatives at the World Economic Forum’s annual summit at Davos, Switzerland later this week
India and Sri Lanka are to start high-level bilateral dialogue for setting up a power transmission link between the two countries.
Banking, Finance and Insurance
SEBI amends rules governing Alternative Investment Funds (AIFs). Under the new rules, category I AIFS may engage in hedging, including credit default swaps, and category II and category III AIFs may buy or sell credit default instruments.
Manufacturing
Central Government to launch a Production-Linked Incentive (PLI) scheme for the IT sector with a focus on the production of hardware and servers. It would provide additional incentives based on the incorporation of Indian-designed intellectual property (IP) into products.
With the launch of the Green Hydrogen Mission, the Ministry of New and Renewable Energy plans to release guidelines and standards for making India a global hub for hydrogen manufacturing.
As the semiconductor manufacturing incentive program gains pace, India plans to target countries without semiconductor manufacturing capacities to procure made-in-India semiconductor chips.
Retail and e-commerce
Government initiates discussions on a regulatory framework for live commerce in the country with the Bureau of Indian Standards taking the lead in assessing the need for guidelines and standards in the space.
Logistics and Infrastructure
The Logistics sector sees memorandums of understanding (MoUs) worth ₹16,400 crore in Uttar Pradesh, with Defence and Aerospace being the other two top sectors of interest.
The Department of Telecommunications formulates the Indian Infrastructure Safety rules 2022 to eliminate damage to various digital infrastructure assets, such as optical fiber cable, as a result of digging and excavation activities.
Indian Railways draws up a plan of about ₹18,000 crore to scale up its locomotive maintenance facilities for Vande Bharat trains, eyeing an increase in deployment of these semi-high-speed trains to more parts of the country.
Sustainability
Export-Import Bank of India has raised US$1 billion through a 10-year sustainability bond issue under its Environmental Social Governance Framework.
Upcoming Events
The PMGSY and the Potential of Open Data from Rural India
January 18th | Virtual
The Center for Advanced Studies, as part of its Data Seminar Series 2023, is organising a seminar on “The Pradhan Mantri Gram Sadak Yojana (PMGSY) and the Potential of Open Data from Rural India” on January 18th in a virtual format. PMGSY was launched by the Govt. of India to provide connectivity to unconnected habitations as part of a poverty reduction strategy. The event will be a conversation with Harsh Nisar, who is the Lead Data Scientist in the Ministry of Rural Development, Government of India. More Information
International Conference on Water Reclamation and Reuse
January 15th – 19th | ITC Grand Chola, Chennai
FICCI is organising the 13th edition of International Conference on Water Reclamation and Reuse at the ITC Grand Chola, Chennai from 15th – 19th January, 2023. The theme of this year’s conference is “Water Reuse: Overcoming the Challenges of Growth and Climate Change”. More Information | Registration Link
A Few Good Reads
Gulzar Natarajan looks at the constraints to financing India’s green energy transition.
Being energy-phobic will hurt our attempts to improve lives. Better to pursue an abundance of clean energy, writes Ezra Klein (paywalled).
The data is in. The years since 2014 have seen a substantial acceleration in the eradication of poverty, write Surjit Bhalla and Karan Bhasin.
Can we untie the Gordian knot of wicked problems? Ethan Mollick argues that through sufficient experimentation and understanding, one can.
Amidst the ceaseless geopolitical brouhaha around semiconductor chips, you would be forgiven for wondering how a single manufacturing industry can create such chaos. Mario Gabriele explains just how complex the industry is, and why Taiwan’s TSMC has such a moat.
Tweets of the Week
Raj Bhagat visualises the literacy rate across the country:
Vala Afshar helps one understand the world’s economic pie:
Stats of India looks at the most common native languages across different regions in India:
Key Notifications and Reports
The Department of Power, Government of NCT Delhi opened its draft solar policy 2022 for stakeholder comments. Feedback can be emailed to delhisolarpolicy2022[at]gmail[dot]com and last date to submit comments is 3rd February, 2023.
The International Labor Organisation has released a report highlighting patterns in the working time across the world, and the impact of different work arrangements on work-life balance.