Cost of green hydrogen in India set to fall by up to 40%: Report
The cost of
green hydrogen in India
, the country that is aiming big in the
renewable energy
space, is expected to fall by up to 40 per cent with the support and incentives the government is providing, according to a report by the Institute for Energy Economics and Financial Analysis.
The levelised cost of
green hydrogen
in India is seen falling towards Rs 260-310 per kg (USD 3-3.75 per kg).
India provides cheap renewable electricity to hydrogen manufacturers, waives Inter-State Transmission Charges for open access, lowers distribution and transmission charges, and lowers the
GST rate
for hydrogen to 5 per cent.
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Besides, the report asserts electrolyser manufacturers are projected to achieve a 7-10 per cent reduction in total system costs for the first five years, starting in 2024--Rs 2,960/kW (USD 36/kW) being the average annual realisable base incentive.
"While the green hydrogen scheme is an important step for India, refinements are needed to promote long-term investment and project viability," says the report.
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The report asserted that India's green hydrogen mission has been enthusiastically received by industry. It added, however, that the scheme needs fine-tuning to attract startups, be competitive for global players and create a supply chain and secure demand to ensure the industry's long-term viability.
"If successful, it could help build India's green hydrogen industry with benefits for a range of sectors including agriculture, transport and manufacturing," the Institute for Energy Economics and Financial Analysis report added.
India launched its National Green Hydrogen Mission in January 2023 with an overall outlay of Rs 19,744 crores. The country has set an ambitious target of achieving a green hydrogen production capacity of 5 million tonnes by the end of 2030. The programme consists of two distinct financial incentive mechanisms to support domestic electrolyser manufacturing and Green Hydrogen production.
The green hydrogen mission, which aims to establish 5 million tonnes of annual green hydrogen production capacity by 2030, represents a significant step towards realising India's ambitions in the hydrogen economy.
India meets a sizable portion of its energy needs through fossil fuels, and various renewable energy sources, including green hydrogen, are seen as an avenue to reduce dependence on conventional sources of power. Green energy for climate mitigation is not just a focus area for India; it has gained momentum globally.
At COP26 held in 2021, India committed to an ambitious five-part "Panchamrit" pledge. They included reaching 500 GW of non-fossil electricity capacity, generating half of all energy requirements from renewables, and reducing emissions by 1 billion tonnes by 2030. India as a whole also aims to reduce the emissions intensity of GDP by 45 per cent. Finally, India commits to net-zero emissions by 2070.
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