India's Green Hydrogen Dream Falters: Major Projects Stuck, Investor Hopes Dimmed!

Author

Satyam Jha | Whalesbook News Team

Detailed Coverage:

India's ambitious Green Hydrogen Mission, launched in 2023 with a budget of $2.2 billion, is facing significant delays, according to a report by the US-based Institute for Energy Economics and Financial Analysis (IEEFA). The mission aims to produce 5 million metric tonnes per annum (MMTPA) of green hydrogen by 2030, but progress is sluggish. As of August, only a tiny fraction (2.8%) of the 158 projects under development are operational, with most capacity still in the announcement stage.

Key reasons cited for the slow commissioning include inadequate infrastructure for storage and transport, coupled with uncertain demand signals from potential buyers. Higher production costs also make green hydrogen less attractive compared to conventional alternatives. While announced projects exceed double the target capacity, their realization is hampered by these issues.

Impact This news has a significant impact on the Indian stock market, particularly in the energy and industrial sectors. Delays in green hydrogen projects can affect companies involved in renewable energy infrastructure, manufacturing of components for hydrogen production and storage, and sectors looking to adopt green hydrogen as a fuel. It signals potential challenges in achieving decarbonisation goals, which might influence investor sentiment towards companies in this space and the overall perception of India's clean energy transition. Rating: 7/10

Difficult Terms Explained: Green Hydrogen: Hydrogen produced using renewable energy sources, such as solar or wind power, through electrolysis of water. It is considered a clean fuel as its production and use do not emit greenhouse gases. MMTPA: Million Metric Tonnes Per Annum. A unit used to measure large volumes of production, in this case, for hydrogen. Demand Aggregation: A strategy where multiple buyers pool their demand for a product or service to create larger, more predictable orders, which can help reduce costs and ensure supply. Hydoogen Hubs: Designated geographical areas where hydrogen production, distribution, and end-use infrastructure are co-located to promote efficiency and cost reduction.