Green Hydrogen and Small Businesses
Published on : Thursday 06-06-2024
The green hydrogen sector is emerging as a significant opportunity for MSMEs/small businesses, says Darshana Thakkar.
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Green is the new buzzword for this polluted world. After the United Nations Climate Summit 2022 held in Egypt, it has become even more important for the world to switch to green and clean alternatives, or else we’ll be subjected to living in an era of doom.
India has announced a target of energy independence by 2047 and net zero by 2070. Green hydrogen will play a substantial role in achieving these goals. Green hydrogen is produced by electrolysis, where water is split into hydrogen and oxygen using electricity from renewable sources like solar, wind or hydropower. This process results in a clean and emission-free fuel with immense potential to replace fossil fuels and reduce carbon emissions. Another method of producing green hydrogen is from biomass, which involves gasifying biomass to produce hydrogen.
After being recognised as the leader in the solar energy sector, India has taken substantial steps in the green energy sector. As a part of it, the Government announced the National Hydrogen Energy Mission (NHEM) in January 2023 to become the global hub for the manufacturing of green hydrogen and achieve net zero emissions by 2070.
National Green Hydrogen Mission
India imports over 40% of its primary energy requirements from fossil fuels, worth over USD90 billion annually. The targets set by GoI under the National Green Hydrogen Mission for increasing the usage of Green Hydrogen are as follows:
• Oil refineries will be replacing 30% of the fuel with green hydrogen by 2035, starting from 3% in 2025.
• Fertilizer production will be replacing 70% of the fuel with green hydrogen by 2035, starting from 15% in 2025.
• Urban gas distribution will replace 15 % of the fuel with green hydrogen by 2035, starting from 5% in 2025. For this, the Petroleum and Natural Gas Regulatory Board has already approved a 5% blending rate for green hydrogen with piped natural gas (PNG).
Top 10 green hydrogen companies in India
1. Reliance Industries Ltd (RIL)
RIL plans to construct the Dhirubhai Ambani Green Energy Giga Complex in Jamnagar on 5,000 acres to achieve its net zero emission target by 2035. It has set up an investment plan for USD10 billion for the comprehensive ecosystem. RIL has partnered with Faradion, Lithium Werks, REC Solar Holding, and many others to assist in this project.
2. GAIL (India) Ltd
GAIL plans to build India’s largest green hydrogen plant in the Guna region of Madhya Pradesh to produce 4.3 metric tonnes (10MW capacity) of green hydrogen per day, which will be supplied to industries by mixing natural gas.
3. National Thermal Power Corporation Limited (NTPC)
NTPC has decided to expand its operation to some green avenues by producing green hydrogen through a floating solar project.
Indian Oil Corporation (IOC) has decided to adopt hydrogen fueling for at least a 10th of their fossil fuel consumption. They have agreed to set up their refineries in Mathura and Panipat.
5. Larsen and Toubro
L&T has decided to set up its green hydrogen plant in the Hazira district of Gujarat. There, they plan to produce 45 kg of green hydrogen daily. The process will include blending 15% hydrogen with natural gas. They have decided to achieve water and carbon neutrality by 2025 and 2030, respectively.
6. Adani New Industries Ltd (ANIL)
Adani New Industries Ltd is the biggest name in India’s energy and power sector. They have decided to spend over USD50 billion in the coming decade to supplement their green hydrogen capacity. ANIL has partnered with Total Energies of France to produce 1MT of green hydrogen annually by 2030.
7. JSW Steel
JSW Energy, a child company of JSW Steel, has partnered with an Australian company and announced spending Rs 10,000 crore in its renewable energy sector
8. Jindal Stainless
Jindal Stainless has partnered with Hygenco India Private Ltd to set up green hydrogen plants to reduce carbon emissions by 2,700 MT per annum.
9. ONGC
ONGC signed a MoU with M/s Greenko Zeroc Private Limited (Greenko) to collaborate and explore the green opportunities of making green hydrogen, green ammonia, and other derivatives of green hydrogen.
10. Bharat Petroleum Corporation Limited
BPCL will set up a 5 MW electrolyzer in Ahmedabad and Aurangabad to produce green hydrogen. The green hydrogen will be blended with natural gas in the company's existing steel pipelines.
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Opportunities for MSMEs/SMEs in the green hydrogen economy
Under the mission of GoI, innovative startups, and MSMEs working on developing indigenous technology and their adoption will be encouraged by existing programs through specific support mechanisms. The following sectors will witness enhanced opportunities for setting up innovative businesses and their expansion in the coming year.
1. Creation of infrastructure
2. Export of green hydrogen and its derivatives
3. Renewable energy sector for the production of green hydrogen
4. Manufacturing of specialised equipment such as green-producing units, electrolyzers, fuel cells, etc
5. Research & development to facilitate testing, certification, and validation technologies, and
6. Supporting functions like legal framework, banking, and software technologies.
The green hydrogen sector is emerging as a significant opportunity for MSMEs/small businesses due to its potential role in transitioning to a sustainable energy system.
Some of the key areas for small businesses in the green hydrogen ecosystem are:
1. Production Technologies
Electrolyzers: Developing and manufacturing electrolyzers is crucial for producing green hydrogen. Innovations to make these devices more efficient and cost-effective can be highly valuable.
Catalysts and Materials: Research and develop new catalysts and materials to improve efficiency and reduce the cost of hydrogen production processes.
2. Renewable Energy Integration
Solar and Wind Integration: Companies can develop solutions to integrate solar and wind energy with hydrogen production systems.
Energy Storage Solutions: Developing advanced energy storage systems that can work in tandem with hydrogen production to manage supply and demand effectively.
3. Hydrogen Distribution and Infrastructure
Pipelines and Transport Solutions: Small businesses can innovate in hydrogen transport technologies, such as pipelines, tankers, and compression systems.
Refueling Stations: Set up and operate hydrogen refueling stations and technologies for vehicle fuel cells.
Fuel Cells: Manufacturing and maintaining fuel cells for various applications, including transportation (cars, buses, trucks) and stationary power generation.
4. Support Services
Consulting and Engineering Services: These include designing, implementation feasibility studies, project management, technical support, etc.
Training and Education: Offering training programs to educate and upskill the workforce in green hydrogen technologies and safety protocols.
5. Innovation and Research
R&D Partnerships: Collaborating with universities, research institutions, and larger corporations to advance green hydrogen technologies and applications.
6. Policy and Advocacy
Regulatory Navigation: Assisting other businesses in navigating the regulatory landscape and securing permits and incentives for green hydrogen projects.
Advocacy Groups: Forming or joining advocacy groups to promote favorable policies and increase public and governmental support for green hydrogen.
7. Software and Digital Solutions
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Monitoring and Analytics: Software development to monitor hydrogen production systems, analyse performance data, and optimise operations.
Supply Chain Management: Creating digital platforms to efficiently manage the hydrogen production, storage, and distribution supply chain.
By focusing on these areas, MSMEs can be critical in developing and scaling the green hydrogen economy, contributing to a sustainable and low-carbon future.
Darshana Thakkar is an MSME Transformation specialist and Founder of Transformation-The Strategy HUB. She is a pioneer in transforming MSME companies with an Electrical engineering and MBA in operations background and 28 years of hardcore industrial experience. She helps MSMEs define growth paths, derive marketing strategies, improve business operations, adopt digital Transformation, and increase profitability. She is a winner of several regional and national awards and recognition as an MSME activist and women's business leader. The Transformation was listed among the most trusted consulting companies in 2022 and the Top 50 consulting companies for MSMEs in 2023. She holds a few honorary positions among the Industry Associations.
https://www.linkedin.com/in/darshanamthakkar/
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