In 2024, India made significant strides in the Green Hydrogen sector, bolstered by the launch of the National Green Hydrogen Mission (NGHM) in January 2023. With a vision to produce 5 million metric tonnes of green hydrogen annually, the NGHM features two primary components: the Strategic Intervention for Green Hydrogen Transition (SIGHT) and the Strategic Hydrogen Innovation Partnership (SHIP). These initiatives, supported by a ₹19,744 crore allocation, focus on public-private partnerships, pilot projects, skill development, and extensive research and development.
A critical aspect of the NGHM is its emphasis on electrolyzer manufacturing, essential for hydrogen production through electrolysis. The government has already committed significant funds to incentivize this sector, aiming for an initial 3 GW annual electrolyzer manufacturing capacity. This effort is expected to enhance domestic production capabilities and reduce dependence on imports, positioning India as a future global leader in green hydrogen technology and sustainability.
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With already a significant body of work behind it in the Green Hydrogen domain, India in 2024 made an appearance at the World Hydrogen Summit being held at Rotterdam in the Netherlands. This was also the first time that an Indian Pavilion was set up at the Summit. Unsurprisingly, it was one of the largest ones at the event. In Rotterdam, the MNRE Secretary B.S. Bhalla emphasised India’s commitment to nurturing a vibrant, indigenous ecosystem for green hydrogen technology.
He highlighted India’s comprehensive approach under the NGHM, which apart from SIGHT and SHIP components, also includes pilot projects, skill development programs, and Research & Development. Of the total allocation of Rs 19,744 crore for the NGHM, there has been a dedicated allocation of 1,466 crores for pilot projects and hydrogen hubs as well as the allocation of 400 crore for research and development.
The Indian government took a significant step towards establishing the country as a global hydrogen hub with the launch of the National Green Hydrogen Mission (NGHM) in January 2023. Aiming to produce 5 million metric tonnes of green hydrogen annually, the NGHM features two main components with a total outlay of ₹19,744 crore over five years (2025-26 to 2029-30). These components are – the Strategic Intervention for Green Hydrogen Transition (SIGHT) and the Strategic Hydrogen Innovation Partnership (SHIP), which focuses on public-private partnerships in green hydrogen R&D.
At the heart of the NGHM, the SIGHT scheme addresses two crucial areas of the green hydrogen supply chain: electrolyzer manufacturing and green hydrogen production. The SIGHT programme offers Rs 44.4 billion (US$ 541 million) of incentives for companies to set up 1,500 megawatts (MW) of electrolyzer manufacturing capacity.
Electrolyzers are the building blocks of hydrogen production. When electricity is passed through water in an electrolyzer, it results in water’s dissociation into Hydrogen and Oxygen through the process called electrolysis. This is the essence of hydrogen production.
According to Braj Nandan Singh, Head – Project Management Unit (PMU) for National Green Hydrogen Mission-Ministry of New & Renewable Energy, Government of India, “Electrolyzers are crucial to the green hydrogen (GH2) production process, much like the heart and blood are to human life.”
However, he further adds that despite India’s standards for GH2 production via biomass gasification, limited biomass availability and geographical challenges have led to minimal interest, with only 4% of bids coming from this method. Thus, electrolyzers are essential for the green hydrogen mission.
Furthermore, if we want to ensure that we’re producing Green Hydrogen, we have to provide renewable energy-based electricity to the electrolyzer. At present, the bulk of hydrogen being consumed in India of around 5 million metric tonnes is grey i.e., thermal (coal-based). This highlights the fact that accessibility of green/renewable energy is currently limited.
In essence, two verticals are crucial for green hydrogen production: availability of electrolyzers and accessibility to renewable energy. The former is being boosted by the government through component 1 of the SIGHT scheme, which seeks to incentivise electrolyser manufacturing in India.
Government’s push for electrolyzer manufacturing
Under the SIGHT scheme, two tranches for electrolyzer manufacturing have been released, with a total outlay of ₹4,440 crore. These tranches are by way of offering incentives to the industry players to participate in electrolyzer manufacturing.
The overall objective of the NGHM is to produce 5 MMTPA of Green Hydrogen. It is reported that producing this would require somewhere between 60-100 GW of electrolysis capacity. As a start, the first two tranches under the SIGHT scheme have invited bids for up to 3GW electrolyzer capacity manufacturing on an annual basis. “The recent allocation of incentives for 1.5 GW annual production to eight companies and the Request for Selection (RfS) for an additional 1.5 GW annual production under tranche-II of the SIGHT scheme in the National Green Hydrogen Mission highlights the government’s strong focus on electrolyzer manufacturing.” Mr. Braj added.
Source: MNRE National Green Hydrogen Mission
Towards encouraging the industry players, a nuanced approach is visible in the incentives offered in these tenders. Electrolyser manufacturing is being evaluated based on performance metrics, such as lowering Specific Energy Consumption (SEC), increasing Domestic Value Addition (DVA), and improving guaranteed life (at least 60,000 hours) with end-of-life efficiency of ≥80%.
A limit of 56 kilowatt-hour of input/kg of hydrogen production has been placed on SEC of electrolyzers. Alongside this, the minimum efficiency benchmark of 80% is expected to ensure that the electrolyzers being manufactured are energy efficient and provide significant volumes of H2 without too high an input of power. Placing domestic value addition as a criteria supports indigenisation. Such electrolyzers would be made in India, from Indian components and produce Green Hydrogen for India. An instance of this is the partnership between Reliance Group and NeL of Norway, a major player in electrolyzer manufacturing. Startups like Newtrace are entering the electrolyzer manufacturing sector, recognizing the future potential of this sector in India.
Besides this, the tenders feature a capacity segregation into three buckets (Bucket-1, 2A, and 2B) based on net worth eligibility. This means that firms wishing to utilise these incentives for electrolyzer manufacturing can do so under three categories, based on their financial capacity. This is a necessary shift away from the one-size fit all approach. Such classification allows smaller units, including start-ups, to participate in electrolyzer manufacturing. These units will be covered by the Bucket-2B whereas the larger units are covered by the Bucket-1. Learnings from previous experiences in the renewable power domain have been transferred to Green Hydrogen as well.
The early impact of the scheme
In the auction linked to the 1st tranche, private companies like Adani New Industries Limited, L&T Electrolyzers, have committed to 300 MW of annual electrolyzer manufacturing capacity. Gensol Engineering and Matrix Gas secure PLI project to manufacture 63 MW hydrogen electrolysers, supporting India’s Green Hydrogen Mission and 2030 target of 5 million metric tonnes. Public sector undertakings like BHEL have also committed, albeit on a smaller scale (10 MW annual capacity). This shows an early vigour in the industry towards entering the electrolyzer manufacturing sector.
JMK Research projects that this 3 GW annual capacity addition initiated by the 2 tenders under the SIGHT scheme over the next five years will result in 15 GW of electrolyzer capacity in India by 2030. Assuming average Specific Energy Consumption of electrolyzers to be 50 kiloWatt-hour/kg of hydrogen production, this capacity could produce up to 2.62 million metric tonnes of hydrogen per annum (MMTPA) by 2030, meeting 52% of the NGHM’s 5 MMTPA target. However, the government is expected to enhance the quantum of the tenders moving forward, so that the 5 MMTPA target can be met by 2030.
The next steps in line
A sustainable Green Hydrogen production ecosystem requires easily accessible and affordable renewable power alongside a robust electrolyzer manufacturing capacity. India has seen a fall in solar power prices in the range of 82-85% over the past decade and a half. Alongside this, the integrated power grid infrastructure of India further improves the accessibility of renewable power for the electrolyzers.
Having said this, there are still some concerns surrounding the integration of renewable power into the power grid. This stems from the variable and intermittent nature of renewable power generation, causing difficulties in load matching. To really turbocharge the renewable power access to the grid and consequently to electrolyzers, this issue has to be tackled head on.
Another step that is in order is the investment needed for storage and transportation infrastructure for the Green hydrogen produced. Given the volatile and combustible nature of hydrogen, building a safe, secure and sustainable pipeline infrastructure at scale would require significant public and private investment. Kiran Kumar Alla, Senior Director at Plug Power, highlights:
“In the first year of implementing the National Green Hydrogen Mission, it is evident that India has applied lessons from the solar sector to the hydrogen sector. However, green hydrogen production is more technically and commercially complex. The government has focused on electrolyzer manufacturing and hydrogen production, but we should not neglect demand creation. While supporting domestic manufacturing is beneficial, investments should target technologies suitable for most scenarios.”
As of March 2024, the government has already awarded tenders to support the production of 412,000 tonnes of green hydrogen annually. The production is expected to be driven by the market demand of green hydrogen with most carbon-intensive industries seeking to decarbonise. For instance, Jindal Stainless has partnered with Hygenco India Private Ltd. to establish a green hydrogen production plant at its manufacturing facility in Hisar, Haryana. Additionally, Oil India Limited and NTPC have begun producing hydrogen-based Fuel Cell Electric Vehicles (FCEVs).
However, Kiran adds that India needs to be mindful of backing the right technologies after thorough evaluation. “Investments based solely on capex costs alone may lead to expensive outcomes, potentially resulting in much higher costs later on thus defeating the purpose. India and Indian companies should pursue right partnerships and indigenize technology so as to reduce costs, develop domestic capabilities and benefit from growth in global Green Hydrogen market.”
Under the National Green Hydrogen Mission, the government has taken a multi-stakeholder and whole-of-ecosystem approach for incentivising the production of Green Hydrogen in India. The launch of the tenders for electrolyzers as well as those for green hydrogen production are firm first steps in a frontier technology domain. It is expected that focus on other issues like renewable power accessibility, focusing on demand and creation of hydrogen storage infrastructure will be in the pipeline. If the early, proactive steps of the government are anything to go by, India is well placed to become a global hub not just for green hydrogen production but also its export, manifesting the spirit of Aatmanirbhar Bharat – producing in India for the World.
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