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Green Hydrogen Critical to India’s Net-Zero Ambitions Says NITI Aayog, RMI Report

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growatt01-08-2022

A new report by NITI Aayog today highlights the fact that green hydrogen can significantly spur industrial decarbonisation in India and economic growth over the next decades. The report was launched by Shri Suman Bery (Vice Chairman), NITI Aayog, and Shri Amitabh Kant, CEO, NITI Aayog. Harnessing green hydrogen: Opportunities to Deep Decarbonisation In Indiaoffers a path to accelerate India’s transition to a green hydrogen-based economy. This is crucial for India to reach its net zero ambitions by 2070.

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RMI and NITI Aayog co-authored the report. It states that green hydrogen, which is produced by renewable energy via electrolysis of water, will be critical for decarbonizing hard-to-abate industries such as fertilisers and refining. The report states that India can position this decarbonization opportunity in the context of a low carbon economy, as well as an enabler for energy security and economic growth.

Shri Suman Bery (Vice Chairman, NITI Aayog), spoke at the occasion. He stated, “Green hydrogen can potentially replace fossil fuels in industrial processes.” He also said, “The next steps at policy level could involve arriving to the right mix between mandates/regulations, and price instruments.”

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Shri Amitabh Kant, CEO NITI-Aayog, gave a short presentation about the report. The report was the result of a detailed study that took over a year. He emphasized the importance of green hydrocarbons from the perspective of energy security, and the need for large and sustainable production to lower the cost of green hydrogen. He said that India could become the lowest-cost producer of green hydrogen and lower the price to US$ 1 per kilogram by 2030 if it has the right policies.

Although hydrogen can be made from many sources, India has the advantage of low-cost renewable electricity which makes green hydrogen more cost-effective. According to the report, India’s hydrogen demand could increase by more than fourfold between 2050 and 2050. This represents almost 10% of global demand. The report estimates that India’s green hydrogen market could grow to $8 billion in value by 2030, with the majority of this demand being met by green hydrogen.

Clay Stranger, RMI’s Managing Director, highlighted the potential. He said that there was a lot of interest worldwide in green hydrogen. Countries are currently in the initial stages of formulating strategies and this will determine the winners and losers in the hydrogen economy. This report could be used as a guide for policy-making in India.

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This report outlines the steps that can be taken to reap the benefits of green hydrogen

  • In the near-term, policy measures can lower the cost of green hydrogen in order to make it more competitive with existing prices for gray hydrogen (hydrogen made from natural gas). To make green hydrogen more competitive, industry should set medium-term price goals.
  • The government can promote near-term market development by identifying and funding viability gaps, mandates and targets for industrial clusters.
  • Research and development opportunities in the manufacturing of components such as electrolysers must be recognized and encouraged by appropriate financial mechanisms, such as production-linked incentives (PLI) schemes. This will allow 25 GW of manufacturing capacity for electrolysers by 2028.
  • An internationally competitive green hydrogen industry could lead to green hydrogen exports and hydrogen-embedded low carbon products such as green ammonia or green steel. This can unlock 95 GW electrolysis capacity for the country by 2030.
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RMI is NITI Aayog’s partner in this report. It works to transform global energy systems using market-driven solutions. This will align with a 1.5degC climate and ensure a prosperous, clean, and zero-carbon future. It operates in some of the most important geographies of the world and engages policymakers, communities and NGOs to identify energy system interventions that will reduce greenhouse gas emissions by at minimum 50% by 2030. NITI Aayog’s knowledge ecosystem is made possible by the support of partner institutions. NITI Aayog collaborates with partners to address key policy issues.

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