New Delhi: India should focus on ensuring a stable power transmission system and increasing renewables in the energy mix rather than on capital-intensive green hydrogen, think tank GTRI said in its report on Monday.
Global Trade Research Initiative (GTRI) said that global private investments in green hydrogen are low, with rich countries providing substantial subsidies. India should carefully consider the viability and costs before subsidising its use, GTRI co-founder Ajay Srivastava said.
The report said that green hydrogen is 6-8 times more expensive than standard energy options, making it economically challenging and the cost of producing green steel using this hydrogen is 40-60 percent higher compared to regular steel. "India should focus on stabilising grid power and increasing its renewable energy share rather than investing in an expensive green hydrogen ecosystem," it said adding that the transportation and storage of green hydrogen require specialised infrastructure due to its flammability and corrosiveness, increasing costs and safety concerns. It also said that India should evaluate using grey and blue hydrogen to a greater degree.
Hydrogen is called grey, dark blue, light blue, or green based on the intensity of carbon dioxide emissions into the atmosphere during its production. Hydrogen, the product, remains the same in all cases. Grey hydrogen account for almost all the Hydrogen used in the world. It is primarily used in oil refining (33 percent), ammonia for making nitrogenous fertilisers (27 percent), methanol (15 percent), and steel making (3 percent).
At the current price, for green hydrogen to become widely adopted in any country, massive government subsidies and policies would be required to make other energy sources more expensive, it said. "Therefore, while India can engage in research-level activities related to Green Hydrogen, subsidising its use may not be advisable," it added.
It said that green hydrogen is a promising new energy source, but it is still in its early stages of development and is expensive. "India should refrain from subsidising green hydrogen and leave it to develop on its intrinsic merits," the report said adding Indian industry should explore optimising costs by combining use of grid power and grey and blue Hydrogen.
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