𝘈 𝘯𝘰𝘵𝘦 𝘵𝘰 𝘐𝘯𝘥𝘪𝘢𝘯 𝘊𝘌𝘖𝘴
From seemingly nowhere, green hydrogen seems to be everywhere in the climate discussion.
Some experts even think that the world cannot go to Net Zero without green hydrogen and carbon capture.
That may well be true, but the important question for many Indian CEOs & industry leaders is: WHEN?
Just because Reliance; Total and Toyota are jumping into green hydrogen, does it make sense for hundreds of companies unrelated to the sector to start investing in this now?
And where could they invest?
Ground mounted solar power plants? – an utter commodity.
Electrolyzers? – they will have to depend on external vendor technology – so, no tech advantage.
Logistics & Storage? – some large global & Indian incumbents in gas and liquid transport such as Air Products, Linde, Air Liquide, Inox are already investing heavily, so where does a newcomer stand?
End-use equipment such as hydrogen boilers, fuel cells? – large incumbents in the thermal equipment sector (ThyssenKrupp, local giant Thermax) have been pushing into the market for quite a few years.
The commodity/competitive nature of the supply side is only one of the challenges.
The demand side is even more demanding. Consider the following data, for a prominent use of GH2 – as a storage medium for green power. From the same unit of solar power, a battery will deliver an 80% round trip efficiency for power applications, while super expensive green hydrogen will deliver at best a 40% efficiency.
I wonder who will put in a Kg of green hydrogen to run a motor 𝒕𝒐𝒅𝒂𝒚 when using batteries with the same solar power could cost 25% of the running cost, all things considered? (There are a few who have a reason to, but a select few).
Sectors such as Steel & Aluminium might be forced to use GH2 to comply with looming global carbon mandates (EU’s CBAM…), but these are large companies that might put up the whole hog themselves, given the scale of hydrogen they need.
And now, folks point out how, through Power2X and electrification of heat, green hydrogen will be the pathway to every type of fuel and energy. This pathway is feasible, but even EU and NA are talking about 2030-35 timelines when anyone will start using these at scale. India could take a few years longer.
All said: It could take until 2035 for there to be a good number of green hydrogen touchpoints in India, but 10 years is a long time for many businesses to wait. While investing in the sector right now will be an existential necessity for some companies in energy, fuel and transport sectors, for most others, they will get hammered from both supply and demand sides if they invest today in obvious value chain components.
There are niche opportunities where mid-sized and unrelated firms can invest to get into the game early with small investments, in order to leverage bigger opportunities when they arise. Finding these needs work, but they are there.
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