India's interim hydrogen strategy lacks wider ecosystem detail: USICEF director

A lack of a wider ecosystem plan will limit India's renewable hydrogen ambitions to local production centers, Dhruba Purkayastha of the US-India Clean Energy Finance (USICEF) initiative said March 30 at S&P Global Commodity Insights' Asia Energy Transition Conference.

India released an interim hydrogen and ammonia policy Feb. 17, granting developers open access to renewable power, accelerated permitting and exemptions to interstate transmission charges.

While the strategy offered regulatory guidance "which does work . . . an ecosystem to play hydrogen is not there," the USICEF director said, noting in particular a lack of detail on storage and transport mechanisms.

The policy as it stood would lead to localized hydrogen production close to solar and wind assets, he said.

This might enable fertilizer plants, for instance, to switch away from conventional hydrogen if electrolyzers and solar/wind farms were close to hand.

"I read the policy as a solar policy, not really as a hydrogen ecosystem policy," he said.

India has set a target of 5 million metric tons/yr of clean hydrogen production by 2030. A more detailed policy document is expected, with the possibility of hydrogen purchase obligations placed on carbon-emitting sectors.

New revenue stream

Hydrogen could support the renewable sector's viability, Purkayastha said.

"India is a classic 'winner's curse' market where you have huge interest to start with and then a race to the bottom, when you actually should let the market work," he said.

Indian solar prices are among the lowest in the world. In the country's latest solar auction Feb. 2, SolarOne Energy won 300 MW of a 1.2 GW solar power project in Karnataka state at Indian Rupees 2.37/KWh ($0.03/kWh), data from Solar Energy Corporation of India showed.

Hydrogen gave solar a new revenue stream and "a good pathway (so) the renewable energy business in India remains viable and everybody does not race to the bottom to say, 'I will sell electricity at 1 cent'," he said.

However, for hydrogen to grow beyond local production levels India's power grid would need strengthening to transport large volumes of new renewables, he said.

Problems of transition

This was not to downplay the broader challenge of moving away from coal-fired power.

"I don't think anyone has worked out a pathway because ... closing down a coal power plant is just not closing down a plant. It's an entire value chain whether it is Australia or India," he said.

India was faced with transitioning some of the world's largest fossil-fuel players from producer Coal India, coal transporter Indian Railways and coal-fired generator NTPC.

This had "a social cost, a reskilling cost, a rehabilitation cost and I don't think we have the blueprint to do that," Purkayastha said, calling for a carbon mitigation mechanism to finance the costs of the energy transition.

USICEF is a partnership between the Indian Ministry of New and Renewable Energy, the US' Overseas Private Investment Corporation and a consortium of foundations. It aims to drive access to energy in underserved regions of India by supporting early-stage development of distributed solar power projects.