Market Opportunities & Challenges
India is witnessing an unprecedented rise in fuel prices since June 2021. This has brought the matter of energy security back on the discussion table. The discussion’s central theme has been ever-increasing fuel demand and dependency on imported crude oil for domestic needs. India’s annual energy import cost is in excess of USD 123 billion in 2019. More than 82% of this cost is consumed in importing crude oil and natural gas. Solar PV and wind have revolutionized India’s green energy story in the past decade. Once struggling to meet the peak electricity demand, the country now has a surplus power scenario. Indian Energy Exchange reported that the availability of sell-bids for the day-ahead market in its system is twice that of demand.
Diversification of electricity sources by integrating renewable energy in its grid is helping India in achieving the Paris agreement targets. The country has pledged to achieve 40% installed capacity from renewable energy sources by 2030 and reduce emissions intensity by 33-35% below 2005 levels in its nationally determined commitments to the 2015 Paris agreement.
Market Opportunities & Challenges (Contd.)
Hydrogen: Expected to be a Sunrise Sector Hydrogen is seen as a sunrise technology for achieving net-zero emission targets as it does not emit GHG upon combustion. Its inherent chemical characteristics, multiple end-uses, and harmony with other fuel and energy carriers make it a strong contender of the clean energy transition apart from electrification, battery storage systems, carbon, capture, utilization, and storage (CCUS), bioenergy, etc.
At present, hydrogen is being primarily produced with the help of fossil fuels for use in the chemical, steel, and refinery industry. Today, it is possible to produce Hydrogen market opportunities with the help of renewable energy-based electricity. The ‘net zeroness’ of hydrogen depends on the method of production. Steam Methane Reforming (SMR) incurs a measurable amount of emissions when used for producing hydrogen (Hydrogen produced with such process is called gray hydrogen). Green hydrogen (made from water and green electricity using electrolyzer) is considered the next big movement toward sustainable development. It has found relevance in today’s energy policy narrative, given its ability to decarbonize ‘hard to-abate’ industries. Hard-to-abate sectors (like the steel industry) require a significant investment of green technology than existing carbon-based technologies.
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