India is rapidly moving towards adopting green hydrogen, with the recent approval of a $2 billion incentive scheme by the government. The aim of this scheme is to make green hydrogen production cheaper and establish India as a major exporter in this sector.
Let’s explore the future of green hydrogen in India and whether it’s the right time to consider investing in this sector.
What’s Happening?
According to the Money Control, the green hydrogen energy sector has become a topic of discussion in India these days. Large projects are being approved, and the government is also promoting investment in this sector. In January 2024, Solar Energy Corporation of India (SECI) issued tenders for the production of 1,500 megawatts of electrolysers and 412 kilotons per annum (ktpa) of green hydrogen, awarded to companies like Reliance Industries, Greenko Group, L&T, and Adani.
Not only that, in the interim budget for 2024, the government increased the budget for the National Green Hydrogen Mission (NGHM) from last year’s 297 crores to 600 crores. It cannot be denied that this sector is growing rapidly, but the question is, is investing in this sector the right move?
India’s Green Hydrogen Mission
The recently launched National Green Hydrogen Mission (NHM) is considered a significant step towards accelerating green hydrogen production and preparing India for the future. The mission aims to meet 25% of the country’s hydrogen demand from green hydrogen sources by 2030.
According to the Money Control, various companies have announced plans to start green hydrogen projects considering the increasing demand for green hydrogen.
Companies like L&T and Jindal Steel are involved in this sector. Moreover, last year, JM Financial stated in a note that India’s rapid development in the green hydrogen sector is driven mainly by the increasing demand from oil refineries, exporters, and ammonia-based fertiliser producers.
What’s in it for Investors?
According to Money Control, the Indian government is giving significant impetus to green hydrogen. In January 2023, the government approved the National Green Hydrogen Mission (NGHM) with an initial outlay of Rs 19,744 crores. Additionally, various states such as Uttar Pradesh, Gujarat, and Tamil Nadu have announced subsidies for green hydrogen.
Therefore, the future of this sector looks promising. However, currently, there is no company fully operational in the green hydrogen sector. Nevertheless, some major companies are moving forward with investments, such as Indian Oil Corporation Limited (IOCL), Reliance Industries Limited (RIL), Adani Enterprises, GAIL, and NTPC Ltd.
What’s Next?
According to The Economic Times, India is rapidly progressing towards transforming the energy sector and becoming a global leader. By 2030, India aims to become the primary exporter of green hydrogen.
A recent study by Alvarez & Marsal underscores India’s ambitious endeavors to enter the green hydrogen market, with the potential to generate $3–5 billion through exports and $7–15 billion through import substitution over the coming decade. This initiative forms a crucial part of India’s wider strategy to reduce dependency on imported liquefied natural gas (LNG) and stimulate domestic GDP growth, aligning with global trends towards sustainable energy sources.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not investment advice.
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