Ambani, Adani in India’s green hydrogen rush but hurdles remain

The sun’s searing heat can be punishing on summer days and India’s enormous coastline makes it a challenge to defend. But vast amounts of water and abundant sunlight have opened a path to green energy that could slake India’s vast appetite for fuel.

Indian companies have pledged to commit billions of dollars to green hydrogen projects — but experts caution that the technology is still very new and its commercial viability unproven.  

Green hydrogen is a clean fuel that’s produced by splitting water into hydrogen and oxygen, using renewable energy such as solar power. When burnt, it emits no exhaust, only water. Environmentalists claim it can help decarbonize heavy industries like oil refining, fertilizers, steel and cement, as well as help cut emissions globally.

“At this point, the technology is not mature or cheap enough to be used widely,” Amit Bhandari, senior fellow, energy and investment at Gateway House, a Mumbai-based think tank, told CNBC. He pointed to the example of solar energy which took about a decade to become viable.

The green hydrogen industry is still in its infancy and pilot plants to study the technology and costs will take at least five years to show results, Bhandari said.

“Ten years ago, if you had asked me if solar energy is viable, I would have said ‘no,’ even though solar power potential was known and technology was available. It took off only when the cost became comparable to traditional energy sources over a long period of time,” Bhandari said, adding that he was reluctant to write off a new technology.

Renewables currently account for almost 40% of total installed capacity in India, the world’s third largest crude oil importer after China and the U.S.

But without large-scale energy storage, renewable energy cannot become a viable alternative to traditional power sources. 

Lithium batteries cannot store energy at a large scale even though they are widely used to power electric vehicles. Green hydrogen, which can be stored in large amounts, can power heavy vehicles such as trucks over long distances. 

India’s government last year announced a national green hydrogen policy with a target of producing 5 million tons of the fuel annually by 2030. In February, it provided tax breaks and allotted land to set up plants to boost the investment. 

“Two important resources are required to become a large global player: water and cheap power,” the chairman of Celeris Technologies, Venkat Sumantran, told CNBC. “India has a…