Green hydrogen and ammonia are the way forward!
Image Source: Shutterstock
IBT: How do you perceive the current and future prospects of green hydrogen and green ammonia projects when it comes to sustainable energy?
Vivek Prasad: India’s strategic position between Europe and Japan, along with its competitive power costs, and internal demand for hydrogen and ammonia, presents a unique advantage. Hydrogen is widely used in industries, and ammonia finds applications in fertilizers and refineries. To ensure sustainability and reduce fossil fuel reliance, green hydrogen and ammonia are the way forward. India is well-positioned to harness this potential. The government’s commitment to achieve 5 million tonnes of capacity by 2030, supported by subsidies and waivers, creates a promising outlook for the industry’s future.
IBT: How do you address the regulatory challenges specific to green hydrogen and green ammonia projects when it comes to different Indian regions?
Vivek Prasad: Regarding regulations, there are two key components. The first is a central regulation that offers capital subsidies per kilogram of hydrogen and provides waivers for renewable energy, including ISTS-level transmission charges. This remains consistent across the board. However, as you mentioned, there is variability in renewable energy regulations at the state level. For the production of green ammonia, it is essential to establish plants in the coastal regions of the country, specifically in states like Odisha, Andhra, Tamil Nadu, Kerala, Karnataka, Maharashtra, and Gujarat. These states are actively vying for investments in green ammonia and hydrogen. When approaching state governments, there is an ongoing effort to align subsidies and regulations, particularly in terms of transmission charges, wheeling charges, and exemptions. Some states have already introduced these exemptions, and others are planning to follow suit. The goal is to attract investments to the states, and these regulatory aspects are crucial for the feasibility of green hydrogen and ammonia projects. Exemptions or significant reductions in charges for these projects are expected to make them economically viable. This is the framework within which these regulations operate.
IBT: Considering the agriculture-driven economy in India, how do you envision the role of green ammonia in supporting sustainable agriculture practices and addressing environmental concerns in the country?
Vivek Prasad: To comprehend the significance of green ammonia, it’s essential to understand its primary use in the fertilizer industry, particularly for producing urea and other fertilizers extensively utilized by Indian farmers. Since these fertilizers are government-subsidized, it’s crucial to ensure the lowest possible cost of ammonia, as agriculture plays a substantial role in India’s GDP. Currently, ammonia production relies on natural gas, which is a fossil fuel, or involves importing ammonia from other sources, resulting in what’s often termed “gray ammonia.”
However, the future outlook is promising. Although the current price of green ammonia isn’t on par with gray ammonia, I anticipate that within the next five to ten years, the cost of green ammonia will reach parity with gray ammonia. At that point, people will opt for green ammonia without relying on government subsidies. Presently, government support, including subsidy waivers, is required to bridge the pricing gap. Over the coming years, as the price decreases significantly, we’ll achieve both sustainability and environmental friendliness simultaneously, benefiting India’s agriculture-driven economy.
IBT: How do you see India’s role and potential in the global green hydrogen market? And as for you, what are the unique opportunities and challenges the Indian market present?
Vivek Prasad: India currently stands as one of the world’s largest fossil fuel importers. However, the success of green ammonia has the potential to transform India into a net energy exporter. This shift is significant, considering India’s current status as a major fossil fuel importer. By converting renewable energy into different energy forms, starting with hydrogen and then producing ammonia, India can use these for various purposes, including heating and fertilizer production.
India’s competitive advantage lies in having one of the lowest renewable energy costs, which translates to lower ammonia production costs. Consequently, India is poised to become one of the largest ammonia exporters globally, presenting a substantial opportunity. However, such projects are massive, with costs ranging from 30,000 to 60,000 crores. To make them feasible, substantial financing and government support are essential. Universal regulatory backing from both state and central governments will attract significant domestic and foreign investments.
Moreover, addressing the challenge of green hydrogen and ammonia’s relatively higher price, the government can mandate their use in hard-to-abate industries, such as steel and refineries. This action would create immediate demand for green hydrogen and ammonia in India, potentially alleviating the cost issue and furthering sustainability.
IBT: Land acquisition and site selection can be a complex segment in India. So, how do you navigate these challenges while developing green hydrogen and green ammonia projects? And what criteria are considered for site feasibility in the Indian context?
Vivek Prasad: To produce green hydrogen and ammonia, it’s essential to use 100% green, or renewable, energy. Since renewable energy sources aren’t continuously available, ensuring a consistent power supply for hydrogen and ammonia plants requires two primary approaches:
- Intermittent Operation: One method is to run the hydrogen and ammonia plants only when renewable energy is available. When renewable energy sources, like solar or wind, are producing power, the plants operate. When it’s not, the plants temporarily shut down. This approach ensures that the hydrogen and ammonia produced are entirely green but may not be continuous.
- Large-Scale Renewable Energy Projects: The other approach involves setting up extensive renewable energy projects that generate power 24/7. To support a large ammonia project, an even more substantial renewable energy plant is needed. The selection of locations for these plants is crucial. Areas with high solar radiation and significant wind potential are ideal. In many cases, hybrid plants that combine both wind and solar energy sources are the most effective way to ensure a high plant load factor (PLF) of 75-80%.
Ideally, state governments should support these projects by providing land at concessional rates for renewable energy plants. If not, project developers must carefully choose locations with optimal conditions to maximize the use of green energy in the production of hydrogen and ammonia.
IBT: Are there any plans for collaborating or partnering with Indian entities in the solar, green hydrogen and water sectors from Enfinity Global? And how do these align with your growth strategy in India?
Vivek Prasad: We have established partnerships with various technology and EPC (Engineering, Procurement, and Construction) companies. As developers, we have a significant track record with over 1.5 gigawatts of installations worldwide and a substantial renewable energy pipeline of around 17 gigawatts in different countries. Now, our focus has shifted to green hydrogen production. We are actively collaborating with technology and EPC partners to set up green ammonia and hydrogen plants.
For context, a single plant producing 0.5 million tonnes of green ammonia requires a substantial three gigawatts of renewable energy. This is already a large-scale operation. Our growth strategy is well-defined, and we are poised to leverage our expertise and partnerships in this rapidly expanding industry.
Vivek Prasad is a techno-commercial, Project management professional with over 16+ years of experience in the field of renewable energy, hydrogen/green hydrogen/ammonia, water treatment, Oil & gas sector, and BOO/BOT projects. He has experience in B2B/technology sales, Project execution, financial modelling, and Project management.
Additionally, he works on technology feasibility, project feasibility, market research, cost-benefit analysis on the projects, and project contracts on PPP/BOOT both government & private. He is currently working as Vice President, BD, Green Hydrogen & Green Ammonia, Enfinity Global