Sustainable hydrogen push to biofuels pact

India’s energy transition journey, which has gained pace in the past few years, witnessed traction with major domestic initiatives including the launch of the National Green Hydrogen Mission and viability gap funding for battery energy storage systems (BESS) to increase in its international outreach through the Global Biofuels Alliance.

A major policy initiative for its ambitious transition journey was kick-started with the much anticipated cabinet approval to the ₹19,744 crore National Green Hydrogen Mission with an aim to produce 5 million tonnes green hydrogen annually by 2030. Apart from encouraging projects for the usage of green hydrogen in sectors such as railways and shipping and supporting research and development, the mission has also allocated ₹17,490 crore for incentives under the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programmes to boost production of green hydrogen and electrolyzers.

In another major move this year, the government in April announced plans to add 50GW of renewable energy capacity annually till FY28 in a bid to achieve the 500GW installed renewable energy by 2030. The ministry of new and renewable energy announced that these annual bids of ISTS (Inter-State Transmission System) connected renewable energy capacity will also include setting up of wind power capacity of at least 10GW per annum. This very road map of adding 50GW renewable energy capacity is expected to provide the impetus to power developers and states to push for more green energy projects.

Noting that green hydrogen has gained prominence in the past two years, he said the National Green Hydrogen Mission has helped to kick-start the sector in India with several key states recognizing the opportunity and bringing in policies. “A number of companies, including ReNew, have forged strategic partnerships to tap into this booming market, anticipating India’s initial role in this sector as an export powerhouse,” he added. Srivatsan Iyer, global CEO, Hero Future Energies, said in 2023 India made significant progress towards adding renewable energy capacity to its overall energy matrix. “The renewable energy sector’s growth has generated employment across manufacturing, installation, and maintenance segments, as well as contributed to economic development and social welfare by providing power to remote areas. The rate of adoption of renewable energy has also accelerated, mirroring global trends thanks to the declining costs across the value chain, that have rendered it increasingly competitive, and in many cases cheaper than traditional energy sources.”

Further, continued investments in capacity expansion as well as technology enhancements across the value chain are likely to ensure that costs will remain low, and likely to decline for the foreseeable future, he said, adding that the complementary technology of battery storage has also seen significant decline in cost, further accelerating the adoption of renewable energy.

To boost round the clock renewable power and supporting battery energy storage systems, the Union cabinet in September approved a ₹3,670 crore viability gap funding (VGF) scheme for setting up 4,000MWh of BESS. The scheme has provisions for VGF to the extent of up to 40% of capital cost for BESS, which will bring down the cost of electricity from BESS.

In a written reply to Rajya Sabha, Union minister for power and new & renewable energy R.K. Singh said in the tariff-based competitive bid for installation of 500MW/ 1,000MWh BESS by SECI, the capacity charge discovered is ₹10.83 lakh per MW per month which is ₹10.18 per kilowatt hour (kWh) or unit.

He told the media that the prices have come down. “Now if I hold a bid without VGF, it should not go beyond ₹7 per unit. Already the prices have come down, they will further come down,” the minister said.

According to the government, the battery energy storage capacity developed in the country as on 13 March 2023 stood 39.12MWh.

The National Electricity Plan notified earlier this year envisaged a requirement of 8,680MW/34,720 MWh of battery energy storage system (BESS) during the period of FY22-27 and for the next five years (FY28-32), it projected a requirement of 38,564 MW/201,500 MWh of BESS.

In terms of indigenized production of solar modules, in March, the Union government allocated a total capacity of 39.60 GW of domestic solar PV module manufacturing capacity to 11 companies, with a total outlay of ₹14,007 crore under the Production-Linked Incentive Scheme for High Efficiency Solar PV Modules (Tranche-II). With this the total manufacturing capacity totalling 7.4 GW is expected to become operational by October 2024, 16.8 GW capacity by April 2025 and the balance 15.4 MW capacity by April 2026. The second tranche of the scheme is expected to bring in an investment of ₹93,041 crore.

Currently, India has a solar module manufacturing capacity of about 38 GW and according to the rating agency Icra it may touch 60 GW by 2025.

As India tries to position itself as a global champion of energy transition and green power, it launch the Global Biofuels Alliance (GBA) at the sidelines of the G20 Summit with the US, Brazil, UAE, Italy among the key members. The alliance intends to expedite the global uptake of biofuels through facilitating technology advancements, intensifying utilization of sustainable biofuels, shaping robust standard setting and certification through the participation of a wide spectrum of stakeholders. The alliance will also act as a central repository of knowledge and an expert hub.

India itself has set itself ambitious plans in terms of biofuels and aims to roll out 20% ethanol-blended petrol across the country by 2025. Currently around petrol sold in the country is 12% ethanol blended. Along with lowering emissions, ethanol blending would also help lower the huge import bills on crude oil.

Although the energy transition has gained pace in the country, the progress in terms of renewable energy capacity addition remains slow. According to estimates of Icra, a total of 20 GW of renewable energy capacity will be added in the current financial year and another 25 GW is likely to be added in the next fiscal.

On India’s target of installing 500 GW of renewable-energy capacity by 2030, it noted that this would require an annual addition of 35-40 GW. This, it said, requires smoother land acquisition, more transmission infrastructure and a domestic renewable-energy supply chain.

Further, the expansion of the transmission network also has been lagged against the targets. Recent data from the Central Electricity Authority showed that India achieved only 61.5% of its target on expanding power transmission lines in the first half of the fiscal year.

During April-October, 7,026 circuit kilometres (ckm) of transmission lines were set up, well below the target of 11,420 ckm, according to the CEA’s executive summary for October. The target for the entire fiscal year is 16,602 ckm.

Tags: BESS, Green Hydrogen Mission, India, Sustainable