India's Green Hydrogen Ambitions Hit MAJOR Roadblock: What's Slowing Down Projects & Impacting Investors?

Author

Akshat Lakshkar | Whalesbook News Team

Detailed Coverage:

India's ambitious plans for green hydrogen, a key component of its decarbonisation strategy, are facing significant hurdles. A note from the Institute for Energy Economics and Financial Analysis (IEEFA), a U.S.-based energy think tank, highlights critical issues. It states that 94% of India's planned green hydrogen capacity is still in the announcement phase, with only a tiny fraction operational or under construction.

Key deterrents identified include inadequate infrastructure (storage, transport), unclear demand signals from industries like steel and chemicals, and higher costs making it unattractive for buyers. The National Green Hydrogen Mission, launched in 2023 with a significant budget, aimed for 5 million metric tonnes per annum (MMTPA) production by 2030. However, recent government statements suggest this target might only be met by 2032. While announced projects exceed the 2030 target, actual progress is hampered. IEEFA suggests implementing hydrogen purchase obligations, demand aggregation, and developing shared infrastructure (hydrogen hubs) to reduce costs and boost adoption.

Impact: This news could dampen investor sentiment in India's renewable energy and green technology sectors, potentially affecting companies involved in hydrogen production, infrastructure, and related technology. Delays in green hydrogen adoption might hinder India's progress towards its climate change commitments and energy security goals. The slow pace could also affect the competitiveness of Indian industries that plan to transition to green hydrogen. Rating: 7/10

Difficult Terms: * **National Green Hydrogen Mission**: A government initiative launched to promote the production and use of green hydrogen in India, aiming to make the country a global hub for this clean energy source. * **MMTPA**: Stands for Million Metric Tonnes Per Annum, a unit used to measure the annual production capacity of hydrogen. * **IEEFA**: Institute for Energy Economics and Financial Analysis, an independent research organization that analyzes economic and financial issues related to energy and climate change. * **Hydrogen Purchase Obligations**: A policy mechanism that requires certain entities (like industrial consumers) to purchase a specified amount or percentage of their hydrogen needs from green hydrogen sources. * **Demand Aggregation**: The process of combining the demand for green hydrogen from multiple users to create larger, more consistent orders, which can help reduce costs and improve project economics. * **Hydrogen Hubs**: Geographic areas where infrastructure for green hydrogen production, storage, transport, and use is concentrated, allowing for shared resources and reduced costs.