Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, BJP believes that for India to become a 5 trillion economy in the coming years, it must find out new areas where it can catalyze economic growth. This is where green hydrogen can be important. Not only will a green hydrogen economy establish India’s importance in international leadership, it can also propel its economic growth.
Honorable Prime Minister NarendraModi
has taken it upon himself to be a global leader in climate change challenges
and is committed to the cause of renewable energy. This shows that there is
willpower at the top leadership level for achieving these goals. Because of
this commitment, after COP21, India has taken some bold steps in meeting
emission norms. Consequently, after the Paris Climate Change Summit, India’s
emissions have reduced by 28% since the levels in 2005, according to a report.
We are almost on the verge of achieving the target of reducing emissions by 30%
by 2030.
A major noteworthy measure taken
by India is to set up the International Solar Alliance, with its head office in India, along with France. Another
initiative taken by India to meet its green energy commitments is to obtain
80-85% of its electricity demand through renewable sources by 2050. India is also committed to the United Nations Sustainable
Development Goals, incorporating all the 17 goals into the government policies.
Recently India has achieved target of 40% power generation capacity based
on non-fossil sources.
Green
hydrogen economy: The baton of a zero-carbon future
However,
coal’s share in India’s energy mix constitutes over 44% while oil contributes
to around 25%. The share of bioenergy and CNG is 21% & 5.8% respectively
while that of nuclear & solar energy is critically low. Coal being a fossil
fuel is a recipe for a climate hazard while the oil prices in the country are
skyrocketing and imported oil is inflating India’s import bill. As India treads
farther on the road to industrialization, its per capita energy
consumption will grow from 30% currently, which is lower than the world average
consumption, to almost doublein 2040. This is attributed to the fact that India
has now displaced US to become the second most attractive destination for
setting up manufacturing industries globally.
Though there are certain concerns
about large hydro projects, India has a huge potential in it. Similarly, small
hydro project can be important initiatives although they are nearly
non-existent at present. But at the same time, India now has the world's
fifth-largest solar
power and fourth-largest wind energy capacities. This energy can be used to
produce green hydrogen, a zero carbon emission fuel, and it will be a big game
changer for the whole energy sector.
Hydrogen is a big source of
energy, and though there are several challenges at present, and India is not a
big player in this field, the direction in which private investments and the
government is moving can bring big rewards for the country. It will help in
energy security, decarbonisation, and to meet the target for reduced carbon
emissions. Moving into the sector of hydrogen energy, which can become the most
important component on the renewable energy side, there is an estimation that
an investment of more than US$ 500 billion will be required in the near future.
Many private companies like Reliance, Adani Power, Tata Power and Mittal Power
and even some of the government companies in the energies, like NTPC, have set
up big targets and there is an expected investment commitment of US$ 316
billion by 2030. If the government policies are supportive, and the challenges
pertaining to the implementation of hydrogen energy are met, India can become a
big player in this field.
Creating a conducive
ecosystem for a green hydrogen economy; setting up of National Hydrogen
Mission.
At present, cost is a big
challenge for hydrogen technology. There is also a big competition on the solar
energy side from China. A big challenge that can be found from the private
sector is high interest costs. Though the government is continuously reducing interest
costs, more sources of energy and funding are needed for this to happen. If new
and improved technology is brought along with innovation and research, the
production challenges can be met.
Recognizing the challenges and
finding solutions is also something the government is working on. It is now
coming up with new industrial and logistics policies to address concerns like
transportation and availability of raw material among others. There is also a
focus on building manufacturing bases in India. The government has, in the
AtmaNirbhar Bharat also committed 90,000 crore rupees on the upgradation of
power sector and tackle the issues of grid reforms, improvement in transmission
and improvement in the discoms. The private players as well as the government
agree that hydrogen and silicon are novel fields that can generate a lot of
wealth for the country. Around 1500 crore rupees has been committed by the
government for setting up this National Hydrogen Mission. Various policies are
being implemented and roadmaps are being set up. Ultimately when the objective
is clear and commitment of the highest level for clean and green energy is
there, India will surely be able to achieve its targets.
The Government is coming out with
new National Logistics Policy; it must address issues pertaining to integrated
logistics hubs, hydrogen storage, transportation, warehousing, and ports. Similarly,
internalizing the environmental cost on the corporate sector’s balance sheet, will
help in proper project evaluation for the government and also bring better presentation.
So, the recording of these environmental initiatives in the balance sheet and
internalizing cost is another important issue where more research and
development can take place. Finance accounting professionals as from Institute of Chartered Accountants of India (ICAI) can take this initiative. More
sources of low cost funding are must to propel a robust hydrogen economy in the
country and the government is taking steps towards that.
