India will reach annual green hydrogen demand of 2.85 MMT by 2030 if existing public and private sector momentum for green hydrogen continues and announced projects get implemented over the next few years. The nation will require a total investment of $57.6 billion to support this transition, according to a new report prepared under USAID’s South Asia Regional Energy Partnership (SAREP).
The report states fertilizer and export sectors will account for nearly 37% (1.02 MMT) and 29% (0.81 MMT) of the total 2.85 MMT green hydrogen demand.
In this base case scenario, the report authors considered 10% of India’s refineries switch to green hydrogen, existing city gas distribution pipelines are blended with 10% green hydrogen, 50% of ammonia-based fertilizer imports are substituted by domestic green ammonia, and the country achieves 6% of demand from target importing countries by 2030.
To meet these green hydrogen demand estimates, the report says India will need 62 GW of additional renewable energy capacity, 29 GW of electrolyzer capacity, and 11 MMT per annum of ammonia infrastructure. This represents an estimated investment need of $36 billion, $15 billion, and $6 billion, respectively, by 2030.
Multiple oil public sector undertakings (PSUs) have announced internal targets for the adoption of green hydrogen. The report authors considered internal targets from leading oil PSUs in arriving at the estimates from oil refining and natural gas blending industries.
India is well positioned to emerge as a green hydrogen production hub, given its excellent renewable energy resources, including an installed capacity of 62+ GW solar and 42+ GW wind, existing consumption markets for hydrogen and its derivative products, and availability of suitable sites that can be developed into green hydrogen hubs.
The report states these advantages will allow producers in India to achieve amongst the lowest levelized costs for green hydrogen and green ammonia, estimated at $3,800-4,800 per ton and $850-1,100 per ton, respectively.
The Indian government’s National Hydrogen Mission (NHM) has added further momentum to the growth of the sector. Under the mission, India targets a green hydrogen production capacity of at least 5 MMT/annum by 2030.
The report states India will require an investment of $99.4 billion under the best-case scenario where it reaches annual green hydrogen demand of 5 MMT by 2030 as targeted under the NHM. In this scenario, it assumes the government will introduce significant mandates, subsidies, and other incentives to drive demand in green hydrogen sub-sectors to push production capacity to at least 5 MMT by 2030, in line with the NHM target.
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