Green Hydrogen Plant: The Future of Renewable Energy

Green hydrogen, created by splitting water using renewable energy, stands at the forefront of the clean energy revolution, promising to decarbonize hard-to-green sectors. Dr. Fatih Birol, Executive Director of the International Energy Agency. This sentiment captures the growing belief that green hydrogen plants could herald a new era for renewable energy.

The Current State of Green Hydrogen

Despite the buzz, hydrogen’s current role in the energy mix remains small but rapidly growing. Globally, hydrogen demand reached about 95–97 million tonnes in 2022, mostly for oil refining and chemical production​. However, the vast majority (over 95%) of hydrogen today is produced from fossil fuels, such as natural gas and coal​. This “grey” hydrogen results in significant CO₂ emissions. In contrast, “green” hydrogen – made via electrolysis powered by renewables – accounted for less than 1% of total hydrogen production in 2022​. One report estimates that only 109,000 tonnes of renewable hydrogen were produced globally in 2022​, a tiny fraction of the total but a 44% jump from the previous year as new projects came online. Dozens of pilot plants and demonstration projects are underway, and electrolyzer capacity is expanding quickly. For instance, China alone boosted its installed electrolyzer capacity to over 200 MW in 2022 (30% of the world total) and is on track to hit 1.2 GW by the end of 2023​.

Government policies are accelerating adoption. About 60 countries have now released national hydrogen strategies or roadmaps​, aiming to boost production and use of low-carbon hydrogen.

Transformative Impact

In addition to its versatility, green hydrogen can help connect and decarbonize multiple sectors through its role as a clean energy carrier. For example, hydrogen can be used to store excess electricity generated by solar panels and wind farms and release it later. Unlike batteries, hydrogen is one of the few options for storing renewable energy for long periods of time. Hydrogen can be produced from surplus power during calm or nighttime periods in fuel cells or turbines, helping to balance the grid and provide reliable clean power.

Most importantly, hydrogen can replace fossil fuels in heavy industries and long-distance transportation. By using hydrogen as a high-heat fuel or reactive feedstock, steel mills, cement plants, and chemical plants can reduce CO2 emissions. In addition to making green steel, hydrogen is also used to make ammonia. In transportation, hydrogen fuel cells offer an emissions-free alternative for long-haul trucks, buses, ships, and potentially even airplanes, which batteries alone may not adequately power. Experts note that for heavy trucking and vehicles operating in remote areas, hydrogen could be a more practical solution than batteries, which would be extremely large or slow to recharge for the same job​. Similar to today's natural gas and gasoline, hydrogen can also be distributed through pipelines and fueling stations.

The applications hint at a transformative effect. As a clean alternative to fossil fuels in sectors beyond wind turbines and solar panels, green hydrogen could bind together the entire energy system into a sustainable whole. Using hydrogen aggressively by 2050, up to 24% of global energy demands could be met. Many advocates believe that widespread use of green hydrogen will achieve net-zero emissions throughout the economy - a true revolution.

How Green Hydrogen Is Produced

Green hydrogen is produced via electrolysis, where electricity—derived from renewable sources like wind or solar—splits water into hydrogen and oxygen. This process must be powered by renewables to ensure the hydrogen produced is truly green and carbon-free.

Cost Dynamics and Future Projections

Producing green hydrogen is currently expensive, costing between ₹375 and ₹750 per kilogram, compared to ₹75–₹150 per kilogram for hydrogen from natural gas. However, projections indicate a potential 50% cost reduction by 2030 due to technological advancements and increased production scale. PwC estimates that by 2050, the cost could fall to ₹75–₹112.5 per kilogram in regions with abundant renewable resources.

Key cost facts and projections:

• Current cost: Green hydrogen costs about $5–$10 per kg today (versus $1–$2 for hydrogen from natural gas)​. This high cost is a primary barrier to widespread use at present.
• 2030 outlook: Costs are expected to decrease ~50% by 2030, thanks to cheaper renewable electricity and larger, more efficient electrolyzers​. That could bring typical costs into the $2–$5 per kg range, depending on location.
• 2050 outlook: In the most optimal regions, green hydrogen could cost as low as $1–$1.5 per kg by 2050​. Less optimal regions might see $2–$3 per kg. This assumes continued innovation and heavy investment but illustrates the significant long-term potential for cost reduction.

The Future of Green Hydrogen in India

India, with its vast solar and wind resources, is poised to become a leader in green hydrogen production. The National Green Hydrogen Mission aims to capitalize on these resources to reduce costs and boost production, with a strategic focus on heavy industries such as steel and chemicals, which are pivotal to India’s economy.

The mission envisions developing a green hydrogen production capacity of at least 5 million metric tonnes per annum by 2030, supported by an additional 125 GW of renewable energy capacity. This initiative is expected to attract over ₹8 lakh crore in investments and create more than 6 lakh jobs, while reducing annual greenhouse gas emissions by nearly 50 MMT​.

Strategic interventions under the mission include financial incentives for domestic electrolyzer manufacturing and green hydrogen production, competitive bidding for green hydrogen procurement, and the establishment of Green Hydrogen Hubs in regions capable of large-scale production​