Green Hydrogen at the Core of Government’s Renewable Energy Plans

The fuel can drive renewable capacity addition and storage solutions

February 13, 2023


Green Hydrogen will play a central role in India’s ambition to reach 500 GW of non-fossil capacity by 2030 and in developing energy storage solutions that could potentially replace lithium-ion-based batteries, Minister of Power and New and Renewable Energy R.K. Singh has said.

Singh said that the country is aiming to add about 8 million tons of green hydrogen capacity by 2030. This would require nearly 200 GW of renewable capacity considering one million tons of green hydrogen need 25 GW of power. It will contribute towards the overall renewable capacity addition target, Singh said in an interview with Business Today.

Earlier this year, the Union Cabinet approved the National Green Hydrogen Mission to facilitate demand creation, production, utilization, and export of green hydrogen with an initial outlay of ₹197.4 billion (~$2.3 billion).

The minister said that the government was working to develop different types of storage solutions so that it can cut down dependence on lithium-ion batteries, as China holds 89% of all resources for battery energy storage.

“We are coming up with a bid for round-the-clock (RTC) power using green hydrogen as storage. It will be a pilot project, but if it works, then we won’t be dependent on lithium-ion batteries,” Singh said.

He added that the cost of setting up solar in India at $600,000/MW is the cheapest in the world, which means that India can also produce the least expensive green hydrogen.

However, while the government is looking for alternatives to battery energy storage systems, it is also reaching out to other resource-rich countries to secure lithium.

“Ministry of Mines has been asked to tie up reserves. Australia is willing to give us stakes in some of their lithium mines,” Singh said.

The minister said that the government would bring out another performance-linked incentive program for grid-scale storage. He said that earlier programs attracted companies that had expertise in making batteries for electric vehicles.

However, the country needs firms that have the capability to deploy grid-scale battery energy storage, which can store 1,000 MWh or more energy.

In other comments, the minister said that the government is ready to auction contracts for offshore wind installation off the Gujarat coast as the survey and other documentation requirements are ready. Gujarat is willing to buy power at ₹4(~$0.05)/kWh, and the Central government will provide viability gap funding for the same.

The second offshore wind auction would be in Tamil Nadu, but the survey has not been completed in these areas.

After these two bids, more bids will be floated, where the government will provide companies with 2-3 years to conduct surveys to install offshore wind projects. After this period expires, the entities will have to mandatorily install capacities in their areas within the next three years.

Power producers will have the right to sell the power under the open access mode. The power supply will not attract cross subsidy surcharge, and transmission charges up to 2025 as per the extant rules. Singh said that the ministry would further extend the exemption from transmission charges.

Last year, the government issued a draft tender to select wind power developers for leasing sea-bed areas to develop 4 GW of offshore wind power projects off the coast of Tamil Nadu.

Singh said that India’s rapid expansion of renewable capacity has allowed it to mitigate the shortage in coal production, which hasn’t been able to keep pace with growing power demand.

“In the months of November and December last, power demand grew by 25%, and for the whole of 2022, the growth was 10.5%. We added 29 million consumers during this time,” Singh said.

He added that coal alone would not have been sufficient to meet this demand because it takes two years to obtain environmental clearance and acquire land before a mine can start operations.


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