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Green hydrogen has emerged as one of the most popular alternative energy sources. It is expected to attract an investment of up to Rs 16 trillion in the coming decade, according to a report published in Financial Express (FE). However, the rising cost of production could dampen the prospects for investments, the report cautioned.
Industry experts have said it will take a combination of technological advancements and regulatory support to boost the cost-effectiveness and viability of green hydrogen in the country, the report added.
The present technology for producing green hydrogen does it by splitting water into two constituents: hydrogen and oxygen. The split is performed using renewable power sources such as wind or solar. So far, it is not produced on a commercial scale in India. On the other hand, grey hydrogen, used for industrial purposes, is produced using fossil fuels, primarily natural gas.
Naveen Vaidyanathan, director of CRISIL Ratings, was quoted in the report as saying that the electrolyser technology is well-tested and works reliably. Still, the primary challenge is doing it at a competitive cost compared to other energy sources.
The report added that in January of this year, the Union Cabinet approved a sum of Rs 19,744 crore for an incentive plan to support the production of 5 million metric tonnes (MMT) per annum by 2030. If the plan were to come to fruition, it would make India the top producer of the element, the report said.
At this point, price is the biggest impediment to the production of green hydrogen. However, the situation is expected to improve with the launch of the national green hydrogen mission this year, according to the report, which quoted an industry expert.
FE quoted another industry expert as saying that given the multiple pathways that can facilitate cost reduction, it is only a matter of time before India realises its full potential as a producer of green hydrogen.
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First Published: Fri, March 17 2023. 13:40 IST
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