Hydrogen: A new dimension to India's energy transition

Jul 27, 2020

Home to six of the world’s 10 most polluted cities, India plans to use hydrogen-based technology to revolutionize its energy sector.

In the 2000s, scientists identified hydrogen as a “vital and crucial” element to steer the existing energy system toward a more sustainable, decarbonized form of energy. Over time, however, hydrogen has struggled to meet these expectations due to the decline in oil and natural gas prices.

Nevertheless, hydrogen is an attractive option for shrinking emissions in accordance with the 2015 Paris Agreement to keep global warming in check. In India, authorities intend to use hydrogen-based technology to combat pollution.

Hydrogen and fossil fuels

According to the World Economic Forum, six of the world’s 10 most polluted cities are in India, with some of these cities having endured their longest spells of “severe” air quality.

India’s objective to switch to cleaner fuels is driven not only by emission control but by other factors, such as energy security, access to energy, and job creation. In countries like the United States of America and China, clean energy policies are driven strictly by air pollution levels; in Japan, energy efficiency and security are the main drivers.

According to the International Renewable Energy Agency, 95% of the hydrogen produced comes from fossil fuels (i.e., natural gas and coal), with less than 1% of hydrogen generated through renewable energy. According to estimates by the International Energy Agency, grey hydrogen (hydrogen made from fossil fuels) accounts for around 830 million tons of CO2 emissions—greater than the CO2 emissions generated by the United Kingdom and Indonesia combined.

The process of generating hydrogen from fossil fuels is generally carried out through steam methane reforming (SMR). In this process, natural gas (i.e., CH4) reacts with water (H2O) to emit hydrogen and carbon dioxide. We also know that hydrogen can additionally be produced by tapping the full potential of renewable energy. In regions where power grids lack storage and backups, sudden surges in wind and solar energy can cause overloads. This is where green hydrogen can play a role. Surplus renewable energy can be converted to hydrogen through electrolysis. The hydrogen generated can then be stored and later used for electricity

Important price hurdles

The cost of low-carbon hydrogen production, however, is still a significant hurdle. Currently, the cheapest form of hydrogen being produced comes from the coal gasification process (grey hydrogen) at an average price of $1.50/kg; hydrogen from SMR (blue hydrogen) averages $1.60-$1.80/kg. Currently, production costs for green hydrogen stand anywhere between $3.00-$6.00/kg, which is almost double the price of other hydrogen types. Transporting green hydrogen to the end-user adds to the costs.

The end applications for hydrogen can be in the transport, residential, commercial, industrial, and electricity sectors. Hydrogen is advantageous for vehicles with long-range mileage and heavy payloads. Hydrogen fuel cell electric vehicles (FCEVs) lower CO2 emissions by 30% compared to diesel and petrol vehicles. Due to the higher density of hydrogen, the cost and weight to the amount of energy stored are lower than liquefied natural gas (LNG), an advantage over natural gas. FCEV’s biggest competitor, electric vehicles, have batteries that last for five or six years due to frequent deep discharging, whereas hydrogen tanks, irrespective of discharging or quick refueling, last for more than 20 years.

FCEV infrastructure can be built upon existing gasoline retail units, thereby saving capital costs. Recently, NTPC Limited’s subsidiary, Vidyut Vyapar Nigam Ltd, floated an expression of interest to procure 10 hydrogen-fueled buses and cars to operate between Leh and Delhi. This initiative, undertaken with support from the Ministry of New and Renewable Energy, will also harness pilot projects in Leh and Delhi involving renewable energy for hydrogen generation, dispensation, and storage.

Policymakers need to analyze the entire value of hydrogen production in India and whether it is more ecological/sustainable when compared to electric vehicles. In terms of driving range and refueling time, hydrogen is better compared with electric vehicles. If we analyze from the emissions perspective as explained above, however, the cheapest form of hydrogen production is still from fossil fuels (coal gasification or SMR process). Even though the cost of green hydrogen is the highest, there has been a significant reduction in renewable/green hydrogen from electrolysis since 2010, when the cost was between $10.00-$15.00/kg; today, that cost is in the range of $3.00-$6.00/kg today.

The analysis shows that prices will continue to fall by 2030, where offshore wind-based electrolysis shows another 60% cost reduction. If this happens, along with a reduction in the mass-scale cost of hydrogen storage and transportation, hydrogen fuel cell vehicles could enable more sustainable development compared to electric vehicles (where disposing of used batteries will remain a challenge).

Enriching natural gas with hydrogen

Currently in India there is a focus on blending hydrogen with compressed natural gas (CNG), which results in a gas known as hydrogen-enriched compressed natural gas (HCNG).

HCNG combines the advantages of both hydrogen and methane, as hydrogen reduces carbon emissions, and methane keeps nitrogen oxide emissions in check. It allows customers early hydrogen deployment with nearly commercial technology. HCNG is being treated as the first step toward a future hydrogen economy. Any natural gas engine is compatible to run on HCNG and can do so with minimum modifications. HCNG also allows governments and agencies to promote the use of hydrogen to a greater number of people at less cost. HCNG can help the hydrogen industry develop volume and transportation solutions, and can reduce carbon emissions by 70% as compared to CNG.

The ideal blending ratio of hydrogen to CNG is 20:80. Blending can eventually free domestically produced natural gas, which is currently consumed in the CNG sector, in the range of 10 to 15 millian standard cubic meters per day by 2040 (if the blending ratio of 20% is implemented across India). Recently, Indian Oil started a pilot project of blending hydrogen with natural gas as running fuel for 50 buses in Delhi.

Fueling everyday domestic life

In other applications, hydrogen can be used to fuel the intense heat required in industries such as steel and petrochemicals, with negligible emissions. Unlike other fuels, hydrogen also provides temperature elasticity, with efficiency for low and high temperature operations higher than electricity and natural gas. Currently, the majority of hydrogen is being consumed in the ammonia-producing industries and in oil refining.

Spatial heating and warm water supply account for about 60-80% of residential energy consumption globally. However, in India, cooking with liquefied petroleum gas (LPG) occupies the major energy share of total residential consumption. As evident by Figure 1., local conditions play a role in the inclusion of hydrogen in the residential system. Hydrogen can serve the Indian population as a substitute for LPG/natural gas; more preferably, it can serve as a blend with natural gas and utilize the existing natural gas infrastructure. Gas appliances operate with no serious problems with up to 20% hydrogen blending by volume, thereby the heating efficiency of the supplied gas.

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share of fuels for domestic heating

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The hydrogen council envisions hydrogen accounting for almost one-fifth of total final energy consumed by 2050. This alone would contribute around 20% of the emission clearance needed to curb global warming by two degrees Celsius.

The way forward for India

The Indian government could incentivize the use of hydrogen as fuel by taking policy incentives and adopting a zero-emission standard for vehicles which will drive use of clean hydrogen. In the future, hydrogen will play a major role in moving the energy sector toward renewable resources by storing the extra energy usually dissipated and utilizing it during peak demands. Even future gas infrastructure planning can consider the possibility of transporting hydrogen and, therefore, develop an infrastructure compatible with hydrogen use.

Countries like Korea and Japan have come out with concrete hydrogen roadmap action plans with targets to be achieved by 2040 and 2030, respectively. Earlier in 2006, India developed a pathway for the transition to hydrogen energy. Still, due to the viability of hydrogen production, transportation, and storage, along with the reduced price of fossil fuels, there was relatively less advancement in this sector. The Ministry of Petroleum and Natural Gas has set up a Hydrogen Corpus Fund in the wake of worldwide interest in the use of hydrogen as an auto fuel. More such initiatives should be taken. Hydrogen can be tapped as a future vehicular fuel, which will enable a reduction of carbon emissions as well as in local air pollution levels, which currently are a big concern in India.

Meet the authors
  1. Ankit Gupta, Managing Consultant, Natural Gas

    Ankit has more than 10 years of experience assisting commercial clients, assessing business plans and infrastructure needs for the gas sector. View bio

  2. Abhishek Sahoo, Researcher - Energy