India's Green Hydrogen Future: Cost Projections and Policy Support
Key Ideas
- Levelised cost of green hydrogen in India is projected to decrease to $2.1 per kg by 2029-2030, driven by lower electrolyser prices and improved efficiency.
- Government policies such as PLI incentives are supporting the growth of green hydrogen production, aiming to achieve a competitive advantage for India.
- Green hydrogen is seen as crucial for India's decarbonisation goals and reducing dependence on fossil fuels, despite the current cost disparity compared to grey and brown hydrogen.
- Significant investments and ongoing efforts to reduce electrolyser costs and improve efficiency are essential to meet the target levelised cost of hydrogen.
A report by CareEdge Ratings predicts a promising future for green hydrogen in India, with the levelised cost expected to drop to $2.1 per kg by 2029-2030. This reduction is attributed to a projected 35-40% decrease in electrolyser prices, a 12-14% improvement in efficiency, and supportive government policies. The report emphasizes that this cost reduction, combined with lower renewable energy prices and policy incentives, will give India a competitive edge in the green hydrogen sector. While green hydrogen is seen as a key player in India's decarbonisation efforts and energy transition, its current cost remains higher than grey and brown hydrogen. The report highlights the necessity of significant investments, including a Rs. 2.40 lakh crore outlay to produce one million metric tonnes of green hydrogen. Despite challenges such as cost disparities and the need for improved efficiency, the report underscores the importance of ongoing initiatives to achieve the targeted levelised cost of $2.1 per kg. Policy measures like PLI incentives, direct production incentives, and support for electrolyser capex are crucial steps towards realizing India's green hydrogen potential.