Energy Transition to magnify Indian Economy

 Energy Transition to magnify  Indian Economy 

The top two imports which directly impacting on the Indian economy are Crude oil and electronic components such as semiconductor chips etc. which accounts to more than 60% of the import bill. 

India is heavily dependent on crude oil imports to meet its energy requirements . India imports 86% of the country’s crude oil requirements. The Indian economy is frequently impacted both directly and indirectly by rising the oil prices. The “fuel” decision is extremely crucial because it’s the bases on which the whole economy runs

India is on the cusp of making its biggest transition. The Indian government is planning a massive expansion of “Green hydrogen” production to curb its dependence on energy imports and to wean the economy off fossil fuels and also to meet climate targets. The cabinet has approved the National Green Hydrogen policy on 4th January 2023 with initial outlay for the mission is about Rs.19,744 Crore in the form of various incentives for related industries which include Rs 17,490 Cr for strategic Interventions for Green Hydrogen Transition (SIGHT) programme, Rs 1466 Cr for pilot project, Rs 400 Cr for R&D and Rs 388 Cr towards other mission components. The mission targets to achieve the following  by 2030, 

• The Green hydrogen production capacity of at least 5 MMT per annum. 
• Appx. Rs 8 Lakh Crore of investment, 
• Creation of over 6 lakh jobs, 
• Cumulative reduction in fossil fuel imports over Rs one lakh crore, 
• Abatement of nearly 50 MMT of annual greenhouse gas emissions. 

The Union Minister Mr.Nitin Gadkari is extensively talking about the Green hydrogen economy and making India not only self-sufficient in Green Hydrogen, but the world’s largest exporter.

Green hydrogen is basically hydrogen that is extracted through electrolysis, and the electricity supplied in the process is from a renewable source. It is then supplied to pumps where it fuels hydrogen vehicles.These vehicles have hydrogen fuel cells that convert hydrogen into electric current and  emit only H₂O behind.

It also creates question if it is so simple and the electrolysis is so commonly known, why hasn’t hydrogen already replaced fossil fuels? Yes, it is simple But , We need huge and crazy  amount of energy to produce the Hydrogen. 

That is the reason we keep reading a contradictory debates in the market, Elon musk from Tesla  has  commented against Hydrogen. His argument is, why to use electricity to produce hydrogen and then use it to fuel a car, when you can use electricity directly? It requires  to  store , transfer and put in to vehicles which use hydrogen fuel cells to produce electricity. And that means higher cost of fuel. The multiple process of converting  that electric energy into potential energy i.e. hydrogen. And then you transfer that potential energy into a fuel cell that again makes electricity to run the motors.  And here comes the question of efficiency. That means how much energy can be produced to run the car, as compared to the fuel required. In electric vehicles there’s a direct transfer of electric current to run the motor. This reduces chances of energy leakage. Electric cars have 77% efficiency. On the other hand, in hydrogen cars, there’s an indirect transfer of energy causing energy leakages during conversion of energy from one form to another. Hydrogen cars have 33% efficiency. So his belief  is Electric Vehicles are better than hydrogen fuel cell cars.

But what we need to understand here is Green hydrogen is not just limited to cars. India needs hydrogen for trucks, buses, trailers, trains  and other heavy vehicles. Heavy Electric vehicles’ have proven to not be very practical.We have to understand that a truck having to wait for hours to charge is a liability to the economy. Not just that, where will we make the space to charge electric trucks and make the drivers wait? Also with the kind of battery technology available right now, we would need a large amount of batteries to fit into electric trucks to make them compete with diesel. It’s not feasible.

 But Hydrogen solves that. Hydrogen trucks have compressed hydrogen that doesn’t make the truck as heavy as the battery cells and takes less space. This hydrogen is used to produce electricity to power the motor in the trucks whenever required. This technology is definitely better than E-trucks because the range hydrogen offers with the amount of space it takes, is very high. Plus you can easily refuel such trucks in stations similar to petrol and diesel. No need to wait for long hours to charge the battery. 

India strongly believes the Green hydrogen can drive the Indian economy by replacing the crude oil imports. One of the debate Nithin  Gadkari’s also mentioned about the  heavy industries. Presently, steel, chemical, cement, etc. industries produce a lot of CO2 (making up 16% of the global CO2 production) and are the hardest to decarbonise. Primarily because they can’t become fully electric. A lot of processes inside them require extreme heat, but electric grids just can’t power all that. Hydrogen on the other hand becomes a great alternative to fossil fuels in this case because of its high energy density.This can truly become revolutionary for India’s fight against industry-based emissions.

But the challenge before the India is Green Hydrogen is expensive. How will we solve for that? 

The India Government is trying its best to help to reduce the cost of generation by introducing a Production-Linked Incentive (PLI) scheme to incentivise the production of low-cost electroayzers in India that are required for the electrolysis process. PLI scheme for the Solar integrated fab is already initiated to replace the heavy import bills in the solar energy supply chain which may also help to reduce the cost of solar power in India. 

Government is also thinking about introducing clear mandates for heavy industries to switch to Green hydrogen that would lead to a lot of demand for generation of “Green Hydrogen”. Also Providing plenty of tax & infrastructure ecosystem benefits. It’s only a matter of time when a lot of companies jump in to grab this opportunity to produce green hydrogen from India, not just for us, but for the world. And this will bring down the cost of "Green Hydrogen” dramatically. This becomes a great opportunity for India! If India is quickly able to create processes to reduce the costs of production of Green Hydrogen and set an example for the world on how to use it, India will be back as the economic centre of the world.