‘India’s hydrogen demand likely to rise at 3% CAGR to 8.8 mn tonne per annum by 2032’
New Delhi: India’s hydrogen demand is expected to rise at a compound annual growth rate of 3 per cent to 8.8 million tonne per annum by 2032, a report released by India Energy Storage Alliance on Tuesday said.
The report unveiled on the first day of India Energy Storage Week here said that despite announcements of green hydrogen projects of over 9 MTPA capacity, few in India have reached the Final Investment Decision (FID) or secured long-term offtake agreements from domestic or international markets.
In the baseline scenario, with 30 per cent of the announced green hydrogen (GH2) capacity commissioned within ten years, electrolytic c bio-H2 (bio hydrogen) supply can meet approximately 31 per cent of domestic demand in 2032.
The report further highlighted that out of 9.2 MTPA GH2 project announcements, 4 states account for 82 per cent projects: Odisha (38 per cent), Gujarat (26 per cent), Karnataka (12 per cent), Andhra Pradesh (6 per cent). About 72 per cent of the announced projects are targeting GH2 use for ammonia production, whereas 20 per cent have not announced end use applications.
Debmalya Sen, President, IESA said “This gathering will pave the way for India’s transition to a resilient energy system, ensuring we meet our growing energy demands while keeping our target of production capacity of 5 MTPA of green hydrogen by 2030 in sight.” Vinayak Walimbe, Managing Director, Customized Energy Solutions, stated, despite various policy interventions and government initiatives to promote the green hydrogen mission, several challenges remain in addressing the urgent issue of decarbonization.
For consumers who obtain hydrogen - representing about 6 per cent of the total hydrogen market - the landed cost of hydrogen is even greater due to storage and transportation expenses. Additionally, open-access electricity regulations often restrict the renewable energy offset for commercial and industrial consumers, which could reduce the capacity utilization of electrolyzers.
As per the report, estimated Levelized Cost of Hydrogen in the base case is two to four times higher than the production cost of fossil fuel-based hydrogen. In a highly optimistic scenario, the estimate is 1.5 to 2.5 times higher, which is very close to the recent first price discovery of green hydrogen in India, it stated.
