Opportunities for green hydrogen manufacturing capability development in India
Green hydrogen, produced using renewable energy sources, has emerged as a promising fuel in the global drive towards decarbonization. The growing demand for green hydrogen has opened up opportunities for developing the domestic manufacturing capabilities in the sector, particularly in India. As the world’s third-largest energy consumer, India has the potential to become a major player in the green hydrogen market, but it must first develop the necessary manufacturing infrastructure. In this article, we explore the opportunities for developing the domestic manufacturing capability in the green hydrogen sector in India.
One of the key challenges in developing the domestic manufacturing capability for green hydrogen production in India is the import dependence for metals like platinum, iridium, and nickel that are crucial to stack manufacturing. The import dependency reduces near-term competitiveness and challenges private sector interest in developing stack manufacturing capabilities within the country. However, the country can still leverage its expected growth in domestic green hydrogen demand to encourage private sector interest.
To begin manufacturing electrolysers in-country, the government could develop strategies such as investing in research and development of low-cost electrolyser technologies that require minimum rare earth metals, securing a robust supply chain of metals and minerals, and identifying electrolyser recycling strategies. Additionally, spurring local demand for green hydrogen through mandates and incentives can help create demand certainty for manufacturers to build up stack manufacturing capabilities.
Balance of Plant
Another opportunity for developing the domestic manufacturing capability in the green hydrogen sector in India is in the balance of plant (BoP) components. Power supply, water circulation, and hydrogen processing units account for 50% of the electrolyser costs and have the potential for further cost reduction. India can emulate the progress it has made in the electronics space and incentivize local manufacturing of BoP components to grow its position in the global electrolyser market.
Efforts are required to identify and establish standardized BoP components for the global electrolyser market. Collaboration with global manufacturers to establish standards for BoP components can help establish a level playing field for Indian manufacturers. Further, improving the supply ecosystem in the country can increase overall domestic value capture.
The green hydrogen sector presents significant opportunities for developing the domestic manufacturing capabilities in India. The country has the potential to become a major player in the global green hydrogen market, but it must first address the challenges of import dependency and skill development. Developing strategies to incentivize and spur local demand for green hydrogen, investing in research and development of low-cost electrolyser technologies, and collaborating with global manufacturers to establish standards for BoP components are some of the steps that can be taken to develop the domestic manufacturing capability in the green hydrogen sector in India. With the right policies and investments, India can become a leader in the green hydrogen economy and contribute to the global efforts towards decarbonization.