View: Why India needs to look at green hydrogen

India's current energy import bill is over $160 billion (Rs 12 lakh crore) a year. The continued coal and oil dependency will increase this amount 2-3 times, apart from pushing the country to the brink of an environmental catastrophe. Consumers, and some governments across the world, are demanding for more sustainable products. This trend will only intensify and will become less of an opt-in and more of 'table-stakes'.So, for strong economic and exports growth, India has to develop and sell zero- or negative-carbon footprint products. While other major economies spend trillions to decarbonise, India can grow in a carbon-neutral manner. These energy transition technologies include solar, wind, batteries, power electronics and, the latest option, green hydrogen.Green hydrogen (GH) is hydrogen produced by the electrolysis of water using electricity from renewable energy (RE) sources, such as solar and wind. GH has come to the forefront of decarbonisation, since it is a non-fossil fuel-based clean gas that can substitute fossil fuels, especially where electrification is not a viable option. With no country dominating the GH space yet, India has a big opportunity to become a leader in GH deployment and production.The announcement of the National Hydrogen Mission (NHM) on August 15, 2021, is a statement of intent India must now capitalise on. GH can compete with oil today. Hydrogen fuel cell-based trucks would be more fuel-efficient, more economical, and a real alternative to diesel even today.India needs to act in multiple directions to establish itself as a GH hub. Immediate policy initiatives are needed to create demand for GH. Providing incentives and sectorial targets for this fuel can kickstart the industry. Some potential policy interventions for demand creation include integration of GH targets with the existing Perform, Achieve and Trade (PAT) scheme, and implementation of GH purchase obligation for industries. A long-term policy roadmap is also required to decarbonise other sectors such as steel and fertilisers.There should be support for creating an integrated domestic manufacturing ecosystem for GH. Domestic electrolyser manufacturing, R&D support for power electronics and other parts of the supply chain need to be promoted. This can facilitate high levels of indigenisation across the supply chain.Hydrogen production would require cheap renewable electricity, which accounts for roughly 50% of the levelised cost of hydrogen (LCOH). Solar and wind energy in lowest possible tariffs is necessary to make the cost of GH viable for the transition. To facilitate this, dollar-denominated tariffs for solar and wind can be created to bring cheaper foreign equity as well as debt.Finally, a potential Achilles' heel for hydrogen is in its handling and transportation. Hence, a framework for a power transmission superhighway with concessional transmission costs for green power should be created. Essentially, we should produce solar and wind power, where it can, at the lowest cost, transmit the power to where hydrogen is required locally. This would reduce handling cost, increase flexibility in ramping-up hydrogen adoption and eliminate 'natural monopolies' from taking over. The superhighway will enable hundreds of businesses to take part in the hydrogen economy.In line with the above principles, a National Green Hydrogen Mission (NGHM) can create an ecosystem that supports rapid adoption of GH. With the requirement of over 10 ministries to cohesively collaborate, NGHM would bring various ministries, concerned public sector undertakings (PSUs) and other stakeholders on board for India to achieve energy independence. If India can emerge as a global hub of GH, it will attract investments, provide solutions and gain strong global support from other economies for addressing the problem of climate change.Climate change is a global problem and any company that comes forward to support India will see the most timely and effective use of their dollars spent to abate climate change. In the quest to become a GH leader, India needs to rapidly scale up its hydrogen equipment industry and pioneer the transition of various applications to GH. While developed countries may take longer in transitioning to GH by building new infrastructure or retrofitting existing facilities, they would most likely invest in India for ecological conservation and business objectives.If India can just do it right in the first go, it will significantly leapfrog to become a global economic leader, and one to do it in a sustainable way.The writer is investor, Ohmium

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