The game-changing fuel reinventing power grids and slashing fossil fuel reliance
It is hard to imagine a future at the moment where India’s steel mills and long-haul trucks emit zero carbon emissions, all while slashing the nation’s hefty fossil fuel imports. This is the ambitious vision of India’s National Green Hydrogen Mission, which targets producing 5 million tonnes of GH annually by 2030. Yet, achieving this scale of production will send shockwaves through India’s power system — a complex mix of coal plants, solar farms and wind turbines. From massive renewable energy growth to smarter grids and hefty investments, GH demands a reimagined power infrastructure. Let’s dive into how this clean fuel will reshape India’s power system, exploring the opportunities it unlocks, the challenges it poses and the strategies needed to power a sustainable future.
India’s Power System: A Transition in Progress
India’s power landscape is undergoing a dramatic shift. As of 2024, the country has 422 gigawatts of installed capacity, with coal dominating nearly half and renewables like solar and wind making up about a quarter, according to the Central Electricity Authority. The government is pushing hard for 500 gigawatts of clean energy by 2030, supported by policies like Renewable Purchase Obligations and carbon markets, as highlighted by Grid Controller of India Limited. The National GH Mission aligns with this goal, aiming to produce 5 million tonnes of GH yearly. This massive undertaking requires an additional 135 gigawatts of renewable energy — 51 gigawatts of solar and 84 gigawatts of wind — alongside 74 gigawatts of electrolyser capacity, per the Council on Energy, Environment and Water. This will generate 310 billion units of electricity, boosting peak demand to 409 gigawatts by 2030. GH’s ability to decarbonize sectors like fertilizers, store energy and balance the grid makes it a cornerstone of India’s energy transition, but its integration will push the power system to its limits.
A Renewable Energy Surge: Powering Hydrogen with Sun and Wind
The most profound impact of GH production will be a renewable energy boom. To produce 5 million tonnes annually, India must add 135 gigawatts of renewable capacity—nearly half of today’s entire grid—split between 51 gigawatts of solar and 84 gigawatts of wind, according to the Council on Energy, Environment and Water. States like Gujarat, with 43 percent of this new capacity and Tamil Nadu, with 24 percent, will lead the way, leveraging their abundant sunshine and coastal winds. By 2030, this expansion will propel India’s renewable capacity to 560 gigawatts, increasing clean power’s share from 33 percent to 40 percent of the electricity mix. The economic benefits are clear: electricity generation costs will dip from INR 3.83 to INR 3.76 per kilowatt-hour, saving INR 18,800 crore or USD 2.3 billion, annually. However, this renewable surge demands land equivalent to 2.45 percent of India’s total area, raising concerns about competing needs like agriculture or cultural preservation. Balancing these local constraints will be critical to sustaining this clean energy wave.
Electrolysers as Energy Sponges
With more renewables comes a grid that’s increasingly unpredictable, as solar and wind power fluctuate with weather and time. The Council on Energy, Environment and Water projects that grid flexibility needs will quadruple, soaring from 250 megawatts per minute in 2022 to 1,100 megawatts per minute by 2030 during peak hours. Production of Green Hydrogen offers a clever solution. Electrolysers, which convert water into hydrogen, can act like energy sponges, absorbing surplus renewable power when generation is high and easing off during shortages. This flexibility could reduce battery storage needs by 6 gigawatts, from 44 to 38 gigawatts, by channelling excess energy into hydrogen production. To capitalize on this, India must update its regulatory framework. The Central Electricity Regulatory Commission could recognize electrolysers as grid-stabilizing assets, incentivizing their role in balancing supply and demand. The Central Electricity Authority also needs to establish clear standards for connecting electrolysers to the grid to ensure safety and reliability. Pilot projects using five-minute metering for real-time grid management are promising, but nationwide adoption is essential to manage the renewable influx.
Transmission: Building Energy Highways
Delivering renewable energy to hydrogen production sites requires a robust transmission network. Without an efficient Inter-State Transmission System, India would need an additional 10 gigawatts of renewable capacity, pushing hydrogen production costs from USD 3.6 to USD 4.1 per kilogram and requiring 3 gigawatts more battery storage, per the Council on Energy, Environment and Water. The government is addressing this with plans to add 8,120 circuit kilometers of high-voltage direct current lines and thousands of kilometers of high-voltage alternating current lines by 2030. These upgrades will support over 500 gigawatts of renewable energy integration, with Renewable Energy Zones in states like Rajasthan, Gujarat and Andhra Pradesh acting as clean energy hubs. Dedicated transmission corridors will also enable 10 gigawatts of offshore wind in Gujarat and Tamil Nadu. The Energy Conservation Act, which promotes carbon markets and non-fossil fuel sources, provides a strong foundation for this infrastructure expansion, ensuring GH production can scale seamlessly.
The Cost Equation: Investing in a Clean Future
Green Hydrogen’s financial impact on the power system is significant. Currently, it costs USD4 to USD6 per kilogram, compared to USD 2 for grey hydrogen made from fossil fuels. To compete, India is leveraging low-cost solar and wind through hybrid plants with a 2:1 wind-to-solar ratio and oversizing renewable capacity to keep electrolysers running at over 60 percent capacity. The total investment required is INR 10.6 lakh crore or USD 129 billion, with 71 percent for renewable energy and 29 percent for electrolyser infrastructure, according to the Council on Energy, Environment and Water. This spending will create over 600,000 jobs and drive innovation in electrolyser manufacturing, as noted by the Ministry of New and Renewable Energy. The Strategic Interventions for GH Transition scheme is fuelling this transition with USD 2.3 billion in incentives and tenders for 1,500 megawatts of electrolyser capacity. Extending these supports beyond the scheme’s five-year horizon will be vital to maintain momentum. GH also promises to save USD 190 billion in fossil fuel imports, enhancing energy security, per Energy Central.
Challenges Straining the System
Producing 5 million tonnes of GH poses challenges that could strain India’s power system. It requires 50 billion litres of demineralized water and while desalination is an option, it increases costs and land use. Renewable energy expansion competes with agriculture and urban development, though innovations like rooftop solar or agrivoltaics—pairing solar panels with farming—could ease the pressure. Hydrogen leaks could undermine climate benefits, necessitating strict safety standards. High production costs demand technological advancements, economies of scale and sustained subsidies to rival grey hydrogen’s affordability. These hurdles underscore the need for careful planning to ensure the power system can support GH’s ambitious scale.
Strategies for a Resilient Power System
To maximize GH’s impact, India needs a coordinated approach to strengthen its power system. Extending the Strategic Interventions scheme with long-term incentives will attract private investment and lower costs. Regulatory reforms, such as setting electrolyser connectivity standards and incentivizing their grid-balancing role, will ensure smooth integration. A GH Development Fund could finance pilot projects, share data, and reduce investor risks. Prioritizing transmission upgrades, Renewable Energy Zones and storage solutions like Battery Energy Storage Systems or pumped hydro will keep the grid resilient. International partnerships with countries like Japan or Australia can provide technology and export opportunities, amplifying India’s global influence.
Powering India’s Clean Energy Future
Green Hydrogen is set to transform India’s power system, driving a cleaner, more resilient energy landscape. The addition of 135 gigawatts of renewable energy, enhanced grid flexibility and INR 10.6 lakh crore in investments will reshape how India generates and uses power, cutting costs and emissions while creating jobs. Challenges like water scarcity, land constraints and high costs require innovative solutions, but with smart policies, robust infrastructure, and global collaboration, India is well-positioned to overcome them. Projects in Gujarat and Mundra Port are early signs of progress, signalling India’s potential to lead the global clean energy transition. The path is complex, but the rewards—a sustainable, secure and prosperous power system—are profound.
Reference:
Green Hydrogen Sahi Hai
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