India’s Green Hydrogen Push: Key to Achieving Net-Zero Emissions by 2030
India’s target of reaching net-zero emissions by 2030 is at risk without a significant boost in the green hydrogen sector, according to a report by S&P Global. The report warns that the interim target could be delayed by up to a decade if urgent investments and policy support are not provided.
Importance of Green Hydrogen
The green hydrogen sector is crucial for India’s energy transition strategy. The government has developed a policy framework that includes subsidies, mandates, taxes, and incentives to stimulate growth in energy efficiency, renewable energy, low-emission fuels, and sustainable mobility.
Investment Challenges
Historically, investment strategies have favored fossil fuels, with 37% of allocations going to them and only 5% to green energy in the past five years. Despite increased interest in green energy, traditional fossil fuel companies have outperformed renewable energy companies in capital returns by an average of 8.3% over the past five years.
Energy Mix and Critical Minerals
Gas currently makes up 6% of India’s energy mix, with a goal to increase this to 15% by 2023. India also needs 30 critical minerals for its energy transition, and the establishment of Khanij Bidesh India aims to secure these minerals globally.
Power Sector Reforms
The report suggests prioritizing reforms in the power sector to address issues like high transmission and distribution losses. Encouraging private participation and fostering a competitive market environment can enhance grid reliability and support renewable energy integration.
Energy Efficiency and Manufacturing
Focusing on energy-intensive industries and promoting efficient technologies in public transport and construction can improve energy productivity. Developing manufacturing ecosystems for batteries, electrolysers, and photovoltaic systems is essential, requiring domestic raw material supplies, a skilled workforce, and government procurement support.
Financing and Decentralized Solutions
To scale up clean energy investments, India must create an environment conducive to green bond issuances and innovative financing models. Strengthening financial institutions’ capacities to manage green projects will attract private capital. Promoting decentralized renewable energy solutions and supporting off-grid technology research will address energy access challenges, especially in rural areas. Public-private partnerships can drive significant advancements in technology development.
Doubts Revealed
Green Hydrogen -: Green hydrogen is a type of hydrogen fuel that is made using renewable energy sources like wind or solar power. It is called ‘green’ because it does not produce pollution.
Net-Zero Emissions -: Net-zero emissions mean that the amount of greenhouse gases, like carbon dioxide, released into the atmosphere is balanced by the amount removed. This helps in fighting climate change.
S&P Global -: S&P Global is a company that provides financial information and analysis. They help people understand how different industries and economies are doing.
Renewable Energy -: Renewable energy comes from natural sources that can be replenished, like sunlight, wind, and water. It is cleaner and better for the environment than fossil fuels.
Sustainable Mobility -: Sustainable mobility means using transportation methods that are good for the environment, like electric cars or bicycles. It helps reduce pollution and save energy.
Fossil Fuel Companies -: Fossil fuel companies are businesses that produce energy from coal, oil, and natural gas. These fuels can cause pollution and are not renewable.
Energy Transition -: Energy transition is the process of changing from using fossil fuels to using renewable energy sources. This helps in reducing pollution and fighting climate change.
