Reliance Industries Ltd., controlled by Indian billionaire Mukesh Ambani, is assessing new technologies for making electrolyzes in its efforts to produce low-cost green hydrogen in the country.
As part of the push, the company also plans to bid for any production-linked incentives the government may offer to encourage the technology, Kamil Maheshtala, president for new energy at Reliance, said at the Bloomberg NET summit in New Delhi on Wednesday.
Prime Minister Narendra Modi’s government unveiled the first phase of its green hydrogen policy in February, offering a range of incentives for companies to set up projects. India is considering offering more “sweeteners” for producers, Power and Renewable Energy Minister Raj Kumar Singh said last week.
Green hydrogen has drawn tens of billions of dollars in investment commitments from investors, including Ambani and rival tycoon Gautam Adan. The fuel, produced by splitting water with the help of clean energy like wind power, is seen as critical to decarbonizing hard-to-abate industries such as oil refineries and steel mills, helping meet global targets to zero out emissions and fight global warming.
Maheshtala said India needs to provide certainty about policies and help build a market for green hydrogen by requiring some industries to purchase the fuel, a step the government is already discussing.
Reliance will pursue an aggressive target to produce green hydrogen at $1 per kilogram by the end of this decade, Ambani said last year. At the time, the cost of producing the fuel was between $2.22 and $4.62 a kilogram in India.
Ambani and Adan have pledged more than $140 billion in green investments, as their fossil fuel-driven empires pivot away from oil and coal. Green hydrogen is central to this shift, as the two tycoons champion the government’s ambition to make India a global leader in production and exports of this fuel.
India's first Hydrogen Policy has the potential to morph India into a green hydrogen export hub from being an energy importer, believe analysts, as the policy would not only make merchant green hydrogen highly viable, but also potentially make India the cheapest producer globally.
After years of dabbling, major oil companies are finally planning the kind of large-scale investments that would make green hydrogen a serious business.
They’re chasing a very particular vision of a low-carbon future — multibillion dollar developments that generate vast concentrations of renewable electricity and convert it into chemicals or clean fuels that can be shipped around the world to power trucks, ships or even airplanes.
"The oil majors have been building multibillion-dollar projects since forever," said Julien Rolland, head of power and renewables at commodities trader Transfigure Group Pvt Ltd. "This green hydrogen, green ammonia stuff will be the new energy industry."
The plan is well suited to the companies’ natural strengths in project management and their financial heft, but even with those advantages they’re still making a big bet on an unproven technology that could fall short of its potential.
“I don’t think any company out there has developed anything to these kinds of scales,” said Zero Farrago, head of Australia and global renewables at consultant Crystal A/S.
BP Plc is taking the lead in the $36 billion Asian Renewable Energy Hub, a project that aims to install 26 gigawatts of solar and wind farms over a vast 6,500-square-kilometer (2,500 square-mile) stretch of Western Australia’s Pillars region, and use the electricity generated to split water molecules into hydrogen and oxygen. Once fully developed, each year it would produce about 1.6 million tons of green hydrogen or 9 million tons of ammonia, which can be used to make fertilizer.
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