India Passes $2.3 Billion Renewable Energy Bill

India has a new plan to reach its renewable energy goals, but it isn’t going to be cheap. However, if India wants to attain its net zero carbon emissions goal by 2070, the country needs to accelerate its efforts. For starters, it can’t just decarbonize the energy sector, but also other industries such as steel, cement, refining, etc.

Currently, India is the third-largest greenhouse gas emitter in the world, mainly relying on coal for electricity. What’s more, experts anticipate that India’s energy needs will increase more than any other country over the next twenty years. Unfortunately, even the current rapid expansion of renewable energy sources like solar energy is not sufficient for India to achieve its climate goals.

MetalMiner’s monthly free MMI report gives monthly price trends for renewable metals and 8 different metal areas. Sign up here!

Green Hydrogen as a Renewable Energy Solution

A few days ago, the Indian Government announced a US $2.3 billion program to promote “green hydrogen.” This term refers to hydrogen produced with renewable energy, which continues to prove itself one of the most promising sustainable technologies. With the announcement of this new “National Hydrogen Mission,” India has renewed hopes it can reach its 2070 target.

Indeed, experts in India feel that green hydrogen may be a more effective way to make heavy sectors like steel, cement, and oil refining cleaner. So far, other renewable energy sources, like solar and wind, have proven unable to meet the country’s enormous energy needs.

Green hydrogen is a process in which a facility separates hydrogen from water using electricity generated from renewable resources. As a result, the process produces energy without emitting carbon. However, the technology is still very new, and high production costs remain a significant sticking point.

2023 is here. Have you mapped out your plan to navigating your renewable metal spend for the year, in particular in a recessionary market? Join MetalMiner’s fireside chat: 2023 Market Predictions, Forecasts & Sourcing Strategies. Sign up here!

The Key is to Bring Down Costs

India aims to produce 5 million tons of green hydrogen annually by 2030. India’s Minister, Anurag Thakur, told the media that the new policy will also help bring down the cost of green hydrogen over the next five years. According to Thakur, doing so would not only help India reduce its emissions, but also allow it to become a major exporter in the field.

The announcement left many professionals feeling optimistic. Hemant Mallya from the Council for Energy, Environment, and Water, a think tank for public policy, cited in the report that the price of green hydrogen moved from approximately $4 per kilogram to $3 over one year. Mallya added that increased use should drive costs even lower.

The ultimate price goal is $1 per kilogram. At that point, green hydrogen and renewable energy becomes competitive with coal. However, even if India were to bring the price down to $2 a kilogram, it would still be competitive with the gas currently imported from Russia.

Since green hydrogen requires a lot of capital, the private sector in India has been hesitant to invest in it. Therefore, the Government hopes that pump-priming the green hydrogen industry can boost investor confidence. Sectors experts say a more stable marketplace would draw substantial investments from both local and foreign capital.

According to this report on time.com, India wants to follow in the footsteps of nations like China. This also includes the European Union, and The United States. All of these countries have offered some form of governmental incentive for generating green hydrogen. So far, energy researchers predict considerable reductions in green hydrogen manufacturing prices over the coming years. They also expect a 20-fold expansion in the industry, bringing its value up to $80 billion by 2030.

Get social with us. Follow MetalMiner on LinkedIn.