Green hydrogen cost in India to fall to $2 per kg by 2032: Mission director

Green hydrogen production cost in India will come down to the level observed in brown hydrogen — around $2 per kilogram — between 2032 and 2035, Abhay Bakre, director, National Green Hydrogen Mission, said today. That, however, would require sorting key issues hurting the uptake of green hydrogen in hard-to-abate sectors like steel, he said.

 

“The way we are going ahead, I am sure the cost of green hydrogen will also keep coming down and by 2032 or 2035 it will be almost on a par with any other hydrogen like brown hydrogen. That will pave the way for the best option for the decarbonisation of the steel sector,” Bakre said, speaking at an industry event here.

 

  

He added the issue of affordability of green hydrogen must be seen in the context of challenges typically faced in the adoption of a new technology, including high risk, lack of long-term offtake, and the absence of effective policies. “We have seen a revolution in the form of decreasing solar costs, which have come down to around ₹2 per unit. This happened because these were large capex projects and long-term offtake was available. Also, policies were eased out and connectivity issues were resolved,” Bakre said.

 

The National Green Hydrogen Mission, set up under the aegis of the Ministry of New and Renewable Energy (MNRE), aims to make India a global hub for green hydrogen production, usage, and export by 2030, targeting 5 million tonne production capacity. Green hydrogen is being seen as a key solution to tackle the challenge of decarbonisation in sectors like heavy industries, steel, and refineries.

 

“The option to use green hydrogen in the steel sector is the most feasible in terms of not just boosting the overall growth of the steel sector but also providing a solution which will become viable and affordable in due course,” Bakre said. He also said the recent low price discovery at a green ammonia tender issued by the Solar Energy Corporation of India (SECI) occurred because of the strong policy backing from the government.

 

Last month, SECI had received a bid of ₹55.75 per kg in the first auction for procurement of green ammonia under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme of the green hydrogen mission. The programme consists of two financial incentive mechanisms to support domestic manufacturing of electrolysers and production of green hydrogen, with an outlay of ₹17,490 crore up to 2029-30.

 

The government has allocated ₹455 crore for implementation of pilot projects for use of hydrogen in the iron and steel sector under the National Green Hydrogen Mission. The Ministry of Steel has awarded five pilot projects for use of hydrogen in the steel sector, focusing on partial substitution of natural gas with hydrogen in direct reduced iron (DRI) production, and injection of hydrogen into existing blast furnaces to reduce coal and coke consumption.