Future of Green Hydrogen: Advancements, Challenges, and Global Potential

In this article, we’ll outline the increasing importance of hydrogen, the limitations to its adoption, India’s national policy directives, and successful initiatives that have taken place.

Introduction

Energy consumption has doubled in the past two decades and is projected to rise by at least 25% by 2030. Presently, India imports over 40% of its primary energy needs, costing more than USD 90 billion annually. This dependence on foreign fossil fuels makes key sectors reliant on global supply chains, susceptible to geopolitical disruptions. Additionally, there’s an urgent call for rapid decarbonization, especially in developing nations.

Green Hydrogen is pivotal in achieving both objectives: energy self-reliance by 2047 and achieving net-zero status by 2070. The India Hydrogen Alliance (IH2A) has laid out a plan encompassing 12 decarbonization projects for industries like chemicals, refining, and steel; three projects for heavy-duty transport; three hydrogen-blending ventures for city gas distribution; and seven municipal projects for converting waste to hydrogen. Five hubs are proposed in the coastal states of Gujarat, Karnataka, Maharashtra, Kerala, and Andhra Pradesh, which boast substantial renewable energy potential, positioning India as a significant global hydrogen exporter.

Hydrogen’s growing significance in India is particularly notable in the following sectors:

- Refining: For desulfurizing petroleum products

- Agriculture: In ammonia production for fertilizers and as a hydrogen carrier

- Chemicals: In methanol production and various chemical processes

- Steel: For reducing iron ore

- Transportation: Including long-haul freight, heavy-duty vehicles, aviation, and shipping

By 2050, India’s hydrogen demand could increase over fourfold, constituting nearly 10% of the global demand (see Fig 1). Initial growth will stem from well-established markets like refining, ammonia, and methanol, where hydrogen is already used as an industrial feedstock and in chemical procedures. Over the long term, demand growth will be primarily driven by the steel and heavy-duty trucking sectors, contributing to around 52% of the total demand by 2050.

Figure 1: Demand Projection for GH2 in India without policy intervention. Source: Niti Ayog

Hydrogen’s Significance

Two key factors underline hydrogen’s increasing relevance:

• Exceptional Energy Density: (Fig 2) Hydrogen boasts remarkably high energy density compared to alternative fuels. Refer to Figure 1 for a specific energy comparison between liquefied hydrogen and other fuels.
• Abundance in Nature: Hydrogen is abundant in our surroundings, stored within water (H2O), hydrocarbons (like methane, CH4), and other organic materials. With the advent of eco-friendly extraction methods, this abundance can be harnessed sustainably.

Figure 2: Comparison of Specific energy of different Fuels, Source : IEA, Niti Ayog

What are the types of Hydrogen?

Hydrogen is categorized based on its production source into Black/Grey, Blue, and Green hydrogen.

• Black/Grey Hydrogen: This hydrogen variant is derived from coal (black) or lignite gasification (brown), or through steam methane reformation (SMR) of natural gas or methane (grey). Currently, the vast majority (99.6%) is sourced from hydrocarbons, which leads to high carbon content.
• Blue Hydrogen: A notable advancement, blue hydrogen reduces the overall carbon footprint of production by incorporating carbon capture storage (CCS) or carbon capture use (CCU) technologies.
• Green Hydrogen: This type is generated via water electrolysis powered by renewable energy sources. The carbon intensity hinges on renewable energy’s carbon neutrality in the electricity mix. The higher the share of renewable energy, the more environmentally friendly the produced hydrogen becomes. Green hydrogen also includes hydrogen produced from fermentation involving microbes and biomass, although this process has yet to reach large-scale implementation.

Hydrogen — Current Methods of Production

Table 1 below explains some of the discussed processes (mature and long-term) used for hydrogen generation.

Table 1: Production Methods of Hydrogen

What are the challenges to the adoption of Green Hydrogen?

1. Storage and Transportation

Traditional difficulties in hydrogen storage and transportation stem from its distinctive attributes, including high flammability, low density, ease of dispersion, and higher permeability through solids. Compressed hydrogen storage presents a hurdle due to its low density, necessitating large containers — three times the size of methane and ten times for petrol10, which escalates material costs. Liquefaction improves density but comes with higher energy expenses, consuming up to 30% of the fuel’s energy content, in contrast to 4%–7% for compressed hydrogen.

The NITI Ayog report suggests an alternative — chemical storage using liquid organic compounds like methanol. An innovative focus globally involves adapting existing natural gas pipelines and shipments for safer hydrogen transport, thus diminishing embrittlement risk. Cleanly produced hydrogen can be infused into natural gas pipelines, yielding blends that generate heat and power with lower emissions than natural gas alone. Proper blending also enhances fuel density, simplifying transmission compared to pure hydrogen.

The ATCO Hydrogen Blending Project in Australia (2022, under construction) targets blending GH2 (2–10%) into the natural gas network in the City of Cockburn, connecting about 2,700 users. The HECTOR Project in Germany and the Netherlands (2023, under construction) aims to establish the world’s largest plant for storing green hydrogen (1800 tonnes/year) using liquid organic hydrogen carriers (LOHC) on an industrial scale. This setup primarily caters to industrial and mobility sectors.

2. High cost of electrolyzers

The second critical factor influencing the competitiveness of green hydrogen against petroleum is the cost and production efficiency of electrolyzers. Water electrolyzers are devices that employ electrochemical processes to split water molecules into hydrogen and oxygen through an electric current. They consist of three key components (Fig 3):

• Cell: At the heart of the electrolyzer, the cell facilitates the electrochemical process. Comprising two electrodes (anode and cathode) submerged in a liquid electrolyte or adjacent to a solid electrolyte membrane, the cell also features porous transport layers to facilitate reactant movement and product removal. Bipolar plates offer mechanical support and distribute flow.
• Stack: The stack involves several interconnected cells, supported by spacers (insulating material between opposing electrodes), seals, frames (mechanical support), and end plates (to prevent leaks and collect fluids).
• Balance of Plant: This category encompasses cooling equipment, hydrogen processing (for purity and compression), power conversion (e.g., transformer and rectifier), water supply treatment (e.g., deionization), and gas output treatment (e.g., oxygen handling).

While the fundamental principle remains consistent, electrolyzers are categorized into four main technologies based on cell design, electrolyte type, and technological maturity level (Table 2). Polymer Electrolyte Membranes (PEM) and Alkaline electrolyzers are already in commercial use. In contrast, solid oxide and anion exchange technologies primarily remain in the laboratory testing phase. Consequently, India’s National Hydrogen Policy (NHP) primarily focuses on PEM and Alkaline electrolyzers, given their current standards and mandates.

A detailed comparison of the operational characteristics of the above electrolyzers can be found here.

Figure 3: Components of an Electrolyser, Source: IRENA Analysis

Table 2

To devise effective cost-reduction strategies for hydrogen production, the approach should involve breaking down costs into cell, stack, and system levels, considering both Capital Expenditure (CAPEX) and Operating Expenditure (OPEX). The selection of improvement tactics should be based on their contribution to total costs and potential for reduction. Figures 4 & 5 below illustrate a similar analysis for 1MW PEM and Alkaline Electrolysers. Notably, the primary cost driver for on-site green hydrogen production is the expense of renewable electricity to power the electrolyzer unit. This crucial factor significantly impacts the competitiveness of green hydrogen production.

Recently, Bloom Energy saw the successful deployment of its Solid Oxide Fuel cells, powered only by hydrogen (produced from solar energy and battery design) for zero-carbon power generation in South Korea.

Figure 4: Cost Components in a 1MW PEM Electrolyser, Source: IRENA

Figure 5: Cost Components in a 1MW Alkaline Electrolyser, Source: IRENA

What is the National Hydrogen Policy Targets for India?

Led by the Ministry of New and Renewable Energy, the program aims to stimulate commercial green hydrogen production, positioning India as a net exporter of this eco-friendly fuel. The initiative concentrates on Demand Creation, incentivizing Supply, and securing Financing (Fig 6).

• Developing green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum, alongside adding renewable energy capacity of about 125 GW (gigawatt) in India by 2030. For a country-wise ranking of expected hydrogen capacity click here.
• It aims to entail over Rs 8 lakh crore of total investments and is expected to generate six lakh jobs.
• It will also lead to a cumulative reduction in fossil fuel imports by over Rs 1 lakh crore and an abatement of nearly 50 MT of annual greenhouse gas emissions.

Figure 6: Components of NGHP 2030, Source : Niti Ayog

The strategy unfolds in two phases:

• Phase I (2022–23 to 2025–26): The initial stage concentrates on stimulating demand and bolstering supply by augmenting domestic electrolyzer manufacturing capacity. Through a range of incentives, the goal is to foster indigenous production and amplify the adoption of Green Hydrogen, promoting self-reliance.
• Phase II (2026–27 to 2029–30): The second phase envisions competitive Green Hydrogen costs, rivaling fossil-fuel alternatives in sectors like refining and fertilizers. This competitive edge is projected to accelerate production growth. Phase II aims to expand influence across multiple sectors including steel, mobility, and shipping, fostering deep decarbonization across the economy.

The strategy to drive implementation is led by coordination between multiple ministries :

• Ministry of New and Renewable Energy (MNRE): Leads overall Mission coordination and execution.
• Ministry of Power (MoP): Shapes policies, ensuring affordable renewable energy supply for cost-effective Green Hydrogen production and building necessary power system infrastructure.
• Ministry of Petroleum and Natural Gas (MoPNG): Drives Green Hydrogen use in refineries and city gas distribution via Public Sector Entities and private sector.
• Ministry of Road Transport and Highways: Promotes Green Hydrogen adoption in the transport sector.
• Ministry of Steel: Propels Green Hydrogen integration in the steel sector.
• Ministry of Ports, Shipping and Waterways (MoPSW): Establishes India’s green hydrogen export capabilities, propelling its use in shipping and as propulsion fuel.
• Ministry of Finance: Explores fiscal frameworks for boosting Green Hydrogen and derivative production, utilization, and export.
• Ministry of Commerce & Industry: Nurtures investments, business ease, and trade policy measures for cost-efficient hydrogen and derivative production and trade.

Table 3 summarises some of the developments under the NHP 2030 since June 1, 2023.

Table 3: Developments under NGHP since June 1, 2023, Source: Economic Times

For a more comprehensive discussion on the topic in India’s context, refer to this report by Niti Ayog. For a Global hydrogen review, refer to this report by International Energy Agency.