Hydro power giant NHPC on Saturday said it has signed a MoU with the district administration of Chamba (Himachal Pradesh) for developing a pilot green hydrogen mobility project, including producing hydrogen on a commercial scale in the future.

The MoU was signed between Chamba Deputy Commissioner D C Rana and NHPC Renewable Energy CEO A K Pathak in the presence of Himachal Pradesh Chief Minister Jai Ram Thakur on Friday, NHPC said in a statement.

Last year , NTPC’s renewable energy arm signed an MoU with the Union Territory of Ladakh to set up India’s first green hydrogen mobility project in the region. Initially, NTPC will ply 5 hydrogen buses and will set up a solar plant and green hydrogen generation unit in Leh.

As per the MoU, NHPC will be developing a pilot green hydrogen mobility project including hydrogen production in Chamba. The CPSU will upscale hydrogen output on a commercial scale to meet the hydrogen needs of Himachal Pradesh in sectors such as mobility, transportation, heating and micro grid.

Solar plant

Sources said that NHPC will set up a 300 kilowatt solar plant, which will be used for electrolysis to produce green hydrogen. The green hydrogen will then be stored and used for running tests on commercial vehicles like buses.

The pilot project will create a roadmap for future development of green hydrogen and subsequent reduction of the carbon emission in the transportation sector and will also attract long term investment in the hydrogen economy creating different revenue streams and job opportunities for the youth of Himachal Pradesh, the company noted.

NHPC has formed a wholly owned subsidiary company for development of renewable energy, small hydro and green hydrogen projects named as NHPC Renewable Energy (NREL). This project will be executed by NHPC Renewable Energy, R&D Department of NHPC and Chamera-II Power Station of NHPC.

Why the policy push

Green hydrogen is not only a better substitute for natural gas with respect to controlling emissions and vehicular pollution, but can also be used to store energy thereby making it useful for balancing intermittent power supply from solar and wind. It is also considered a suitable and environment-friendly option to fuel commercial vehicles.

Power accounts for around one-fourth of the overall cost of producing green hydrogen and the government intends to use low cost renewable energy (RE) sources like solar and wind for electrolysis to bring down the cost. Also as electrolyser costs come down over the next few years and India leverages RE sources to produce green hydrogen, analysts expect that prices can come down to $2-3 per kg in the next 4-5 years.

As per analysts, the production cost of green hydrogen from RE sources is in the range of $3-6.50 per kg (around ₹225-490 per kg). The government’s intention is to bring down the costs to below $2 per kg (around ₹150 per kg). Last year at the International Climate Summit 2021, Reliance Industries Chairman Mukesh Ambani said India can set an aggressive target of achieving under $1 per kg within a decade.

Demand

At present, hydrogen is mainly utilised for refining, steel and fertilisers. India’s refining sector consumes around 2 million tonnes(mt) of grey hydrogen annually.

The demand for hydrogen is projected to hit 12 mt by 2030, of which around 40%, or roughly 5 mt, will be green. By 2050, nearly 80 per cent of India’s hydrogen is expected to be green.

Green hydrogen mission

In February this year, Power Ministry notified the green hydrogen and ammonia policy under which it is offering connectivity to the ISTS on priority basis, and free transmission for 25 years if the production facility is commissioned before June 2025. The government has also proposed to set up manufacturing zones and green hydrogen/ ammonia plants can be set up in any of these manufacturing zones.

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