India’s Push For Scale: How Green Hydrogen Can Revolutionise the Energy Landscape

India has taken significant steps with its green hydrogen push. However, achieving cost competitiveness remains a primary challenge and economies of scale are key to unlocking green hydrogen’s economic viability.

Lining Up Initiatives

The capital-intensive electrolysis process is a significant factor in the high cost of green hydrogen. However, deployment at a larger scale enables more efficient supply chains, optimised operations and reduced per-unit costs for electricity and water.

The International Renewable Energy Agency (IRENA) estimates that green hydrogen could reach a competitive cost of $1.5–2 per kg by 2030. This makes green hydrogen comparable to grey hydrogen, which dominates industrial and energy markets due to its lower cost.

Indian corporations are already aligning their green hydrogen strategies with the principles of economies of scale. For instance, Reliance Industries has announced an investment of Rs 75,000 crore over three years to establish a comprehensive ecosystem for new energy and materials.

This initiative includes installing solar photovoltaic module factories, advanced energy storage battery facilities and green hydrogen production units. The company plans to develop the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar, which will house these manufacturing units.

The Adani group will invest $20bn over the next decade to expand its renewable energy capabilities. This investment aims to triple its renewable power generation capacity, including a foray into green hydrogen production.

The Indian Oil Corporation is establishing a green hydrogen plant at its Mathura refinery with a Rs 2,000 crore investment, aiming to reduce production costs through industrial integration. The National Thermal Power Corporation is developing pilot projects to deploy scalable hydrogen solutions, exploring integration with significant renewable energy plants.

Elsewhere in the world, Germany is advancing with gigawatt-scale electrolyser manufacturing to meet future green hydrogen demand. In the US, the Inflation Reduction Act offers a clean hydrogen production tax credit for hydrogen produced with low carbon intensity. This incentive is designed to make large-scale hydrogen projects financially viable, aligning with IRENA’s recommendation that scaling up production and deployment accelerates market competitiveness.

Japan invests in hydrogen infrastructure and technology, including developing hydrogen supply chains and international partnerships, to secure a stable hydrogen supply.

These initiatives demonstrate a global commitment to scaling up green hydrogen production, leveraging economies of scale and technological advancements to drive down costs and enhance market competitiveness.

Planning for the Future 

India’s green hydrogen initiatives are at a critical juncture where economies of scale can drive the transition from a high-cost niche technology to a commercially viable energy solution. By leveraging scale in electrolyser manufacturing and deployment, as mentioned in the IRENA report, the cost of green hydrogen can be significantly reduced, enabling India to achieve its energy security, decarbonisation and economic growth objectives.

However, there are some critical things which India needs to do at this juncture. First, the country must promote research and development in green hydrogen technology to achieve economies of scale for widespread adoption.

A dedicated production-linked incentive (PLI) scheme can be drafted to incentivise domestic production of electrolysers and other hydrogen technologies. This will not only bring the cost down but also promote the manufacturing of critical components in India. It is also critical to encourage investors to invest in green hydrogen technology. Subsidies and tax regimes should also be developed for the sector.

Further, it is necessary to invest in hydrogen storage facilities and transportation infrastructure, such as pipelines and hydrogen fuelling stations. Finally, building a skilled workforce to make the most of this opportunity is crucial. This can be achieved through investing in training and education programmes to develop skilled manpower for the green hydrogen sector.