Green Hydrogen Superpower

With the right policy impetus, India can become a leading electrolyser
manufacturer

Murali Ramakrishnan Ananthakumar, Research Scientist and Lead, Hydrogen Research

Group, Center for Study of Science, Technology and Policy

Every year, India’s energy consumption from fossil fuels is worth approximately Rs 7 trillion
(1). Adding other monetary expenses such as taxes and subsidies would further increase the
expenditure, creating an even bigger energy exchequer for the government. To meet the
climate goals, it is imperative to see the amount of fossil-free energy in the energy exchequer.
From a sustainable development standpoint, for benefits to outweigh costs, decarbonisation
of the energy sector is the need of the decade.

Though renewable energy sources have gained much-needed traction, this decade will
determine where we are in terms of the overall progress—often measured as the carbon
intensity of energy (CO2/PJ). A scalable and carbon-free source could significantly tilt the
carbon intensity of energy sources towards an acceptable norm. Hydrogen has that potential,
especially green hydrogen.

Hydrogen can act as a feedstock and fuel. Currently, hydrogen is produced primarily from
reformers that use natural gas. This hydrogen is used in fertilisers and refineries. The
government might make it mandatory for these demand centres to meet a predetermined
per cent of their hydrogen needs via green hydrogen purchase obligations (GHPOs) (2). Green
hydrogen is produced from electrolysers using renewable energy and water. Water is split
into hydrogen and oxygen through electrolysis, and hydrogen is then stored and used for
energy requirements.

The need for polymer exchange membrane electrolysers

To meet its target of 1 million tonnes of green hydrogen by 2030, India would need around
38 GW of renewable energy with an average capacity utilisation factor of 21 per cent at a
footprint of 1,824 km2 in total (0.048 m2 per kW) (3). Assuming an average plant load factor
and throughput, a total of 9 million cubic meters [roughly 9 litres of water (4) for every kg of
H2] of water would be required to meet this target. Meeting the target can abate a total of
42,000 tonnes of CO2 per year (5). To achieve this, establishing a robust electrolyser market
will be imperative, given its importance in green hydrogen production.

By and large, electrolysers can be categorised into three types: polymer exchange membrane
(PEM), alkaline, and solid oxide (see Table for comparison). If water scarcity were to be a
challenge in the future, instead of pure water electrolysis, seawater electrolysis could be
adopted, which is at a nascent stage of development at the moment. Owing to PEM’s ability
to ramp up and down, better flexibility (while using renewable energy), and desirable power
density, hydrogen produced from PEM electrolysers offers better returns despite the overall
cost. An estimated total of Rs 3 trillion [at Rs 81,400 per kW of the current price(6)] would be
required as the capital expenditure to set up PEM electrolyser manufacturing plants for
producing 1 million tonnes of green hydrogen.

Apart from the number of components encompassing the electrolyser, the high cost will be a
challenge for large-scale adoption. However, new materials (7) usage is being explored and
innovative cell designs (8) are currently being developed. These developments are expected
to reduce the overall cost in the future. Alkaline electrolysers are matured technologies and
offer minimal scope for market capitalisation, given the diverse application of the produced
hydrogen (and its purity). Although solid oxide could be a better choice in terms of metrics
(see Table), it is still at a lab scale. Therefore, it is prudent to invest in PEM-based technology,
which will drive electrolyser needs for the next decade.

Table: Comparison of electrolysers

Criteria Alkaline PEM Solid oxide

Electrolyte KOH (20%–30%) Polymer Nafion Yttria-
Stabilized
Zirconium
Current efficiency (%) 50–70 40–65 80
Specific energy 4.5–7.5 5.8–7.3 2.6–3.5
Consumption system
(kWh/Nm3)
Technology maturity Fully commercial Demo scale Lab scale
Catalyst Ni/Co/Fe, Ni/C-Pt, Platinum, Iridium oxide Ni-Cu
Non-noble metal
Operating cost Low High Medium
Advantages - Mature - Highest H2 purity - Highest
technology - High load gradient: Ideal for efficiency
- High nominal fluctuating renewable energy - Suitable for
output systems co-
electrolysis

Source: Author’s compilation

In a PEM electrolyser, the anode-side (responsible for oxygen evolution reaction) is filled with
water, which diffuses through the porous transport layers (PTL) to the iridium electrode. The
liquid is subsequently split into oxygen and hydrogen. Through the proton conductive
membrane, the protons are transported to the cathode-side by the PEM and combine at the
cathode-side (for hydrogen evolution reaction) with electrons from an external circuit to form
hydrogen gas. Though membrane electrode assembly (MEA) is the core component, bipolar
plates (BPP) and PTL are the most expensive components in a PEM electrolyser stack.

The stack, membrane, catalyst, cathode, and anode account for around 60 per cent (9) of the
overall cost. The anode-side uses stable metals since it is responsible for splitting water.
Titanium is the key material used for manufacturing PTLs and BPPs. It is important to note
that large-scale penetration of PEM electrolysers is contingent on the availability of rare and
expensive metals required to withstand acidic conditions.
Benefits of PLI schemes

With the right policy impetus, India could become a leading global electrolyser manufacturer.
Both AatmaNirbhar Bharat Abhiyan and Production Linked Incentive (PLI) schemes could act
as enablers and offer the much-needed policy thrust from the government. PLI schemes could
ensure that the cost of electrolysers come down from Rs 81,400 per kW to a desirable range
for larger adoption. At reduced prices, green hydrogen production could become competitive
with other main fuels. The PLI schemes could also eliminate sectoral disabilities (rare metal
dependency) and foster economies of scale, further assisting in establishing a complete
supply chain in India. Moreover, the domestic manufacturing capability will be scaled up with
higher import substitution and possible employment generation.

PLI schemes offer turnover-linked incentives to investors when the specified investment and
capacity are achieved. Like the PLI schemes designed for white goods such as air-conditioners
and LED lights, component manufacturers of PEM electrolysers should drive the incentives
within the scheme to bring down the cost. The local procurement of materials could have a
positive impact on the incentives drawn from increased production. Ultimately, PLI schemes
could allow the qualifying companies to avail themselves of incentives of a said per cent on
the incremental sales (over the base year) of goods manufactured in India. Usually, this target
must be achieved within 5 to 10 years after the base year.

India’s first green hydrogen electrolyser (PEM) manufacturing unit was started in Bengaluru
recently by a multinational private company, with a current manufacturing capacity of 0.5
GW per year (10). The recent announcements from the government, such as GHPOs and the
National Hydrogen Energy Mission, are expected to increase the uptake of electrolysers. Also,
growing interests from other private players in the energy sector will bolster the electrolyser
manufacturing capacity in the foreseeable future. This would also mean that the policy
landscape is concise and robust enough to enable businesses that contribute to the
electrolyser supply chain.

The task of accomplishing the green hydrogen production target by the end of this decade
can be daunting. However, the energy sector in India has already demonstrated that
production costs could be reduced significantly with good governance and sound policies. The
mass adoption of solar photovoltaic over the past decade is a case in point. A similar approach
would revolutionise the hydrogen portfolio and establish India as a global leader in the
electrolyser market.

References:

1. Estimated from Energy Statistics data reported by the Ministry of Statistics and
Programme Implementation (MoSPI) and Petroleum Planning and Analysis Cell (PPAC)
2. Budget 2022: Options before India to boost Green Hydrogen adoption, Energy News,
ET EnergyWorld (indiatimes.com)
3. pdf (teriin.org)
4. Ulf Bossel, “Does a Hydrogen Economy make sense?”
(https://www.industrializedcyclist.com/ulf%20bossel.pdf)
5. Average emissions from thermal power generation (0.6 kg CO2 per kWh)
6. pdf (teriin.org)
7. Sigrid Laedre et al, “Materials for Proton Exchange Membrane Water Electrolyzer
Bipolar Plates” (https://ntnuopen.ntnu.no/ntnu-
xmlui/bitstream/handle/11250/2466027/Manuscript+wFigs.pdf?sequence=1)
8. Yanyan Sun et al, “Advancements in cathode catalyst and cathode layer design for
proton exchange membrane fuel cells” (https://www.nature.com/articles/s41467-
021-25911-x)
9. Techno-economic Analysis of PEM Electrolysis for Hydrogen Production (energy.gov)
10. Boost for hydrogen mission, India gets first electrolyser unit in Bengaluru | Business
Standard News (business-standard.com)