India plans to cut green hydrogen costs and seeks cheap finance

0

India is seeking to reduce the cost of producing green hydrogen at $1 per kilogram from the current $5-6 to encourage industry to use greener energy, Niti Aayog CEO Amitabh Kant has said. , in an interview with Bloomberg Television. India also wants access to cheaper finance to help finance the transformation.

In February, the world’s third-largest carbon emitter unveiled a plan to become a center for the production and export of green hydrogen, a fuel generated from water and renewable electricity, although the fuel is still far from commercial viability.

“Unless cheap financing is available to be able to rapidly upgrade both renewable and non-renewable energy, this transition will be difficult to accelerate for a long time,” said Niti Aayog CEO Amitabh Kant. “Low-cost financing is essential. “

In January, Mukesh Ambani – the chairman of Reliance Industries – announced plans to invest $75 billion in renewable energy infrastructure, including power plants, solar panels and electrolysers. It’s becoming increasingly likely that the idea will incorporate converting all that renewable energy into hydrogen, which would be one of the most significant endorsements for next-generation fuel.

Analysts say Reliance Industries will likely choose hydrogen to bypass India’s wholesale energy market, which is controlled by companies in financial trouble and beset by late payments.

New Delhi wants global lenders, including the World Bank, to structure guarantee schemes to facilitate access to funds at low rates, Amitabh Kant said. The green hydrogen will be used to decarbonize “hard-to-reduce” sectors like refiners, fertilizer makers and steelmakers, he said.

India, one of the world’s biggest importers of fossil fuels, is also looking to reduce its dependence on oil, as its import bill is expected to nearly triple to $300 billion over the next decade, according to Amitabh Kant. .

Prime Minister Narendra Modi announced plans in November to make India a net zero carbon emitter by 2070 and a 50% renewable energy consumer by the end of the decade, resulting in policy changes.

It needs around $25 billion to create a nationwide supply chain with an installed nationwide electrolyzer capacity of 25 GW producing 5 MT of green hydrogen by 2030, according to the India Hydrogen Alliance, which counts Reliance Industries Ltd. and JSW Steel Ltd among its members.

India will continue to focus on electrifying two- and three-wheelers as well as public buses, Amitabh Kant said. The government will not push for the electrification of four-wheeled vehicles in the Indian market given the interest from the private sector, he said.

As it stands, the cost of transport electrification is set to fall after India’s recent tender for over 5,000 electric buses landed bids at lower prices than diesel buses and combustion, said Amitabh Kant.

(With contributions from the agency)

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Share.

Comments are closed.