While green hydrogen avoids the use of crude oil, natural gas, or coal as feedstock, the production cost of green hydrogen is currently several times higher than hydrogen produced from natural gas or crude oil.
by N.S.Venkataraman
It is generally said that energy consumption levels are an indication of industrial, economic, and social conditions in society. This is true, as the use of energy is essential for industrial, agricultural, services, transport, power, and other sectors, the growth of which inevitably reflects economic growth and social development.
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With the impressive growth of the Indian economy, particularly in the last ten years, energy consumption has been steadily increasing in the country. To generate energy, fuel is required. The major sources of fuel are crude oil, natural gas, and coal.
Requirement of Crude Oil, Natural Gas, and Coal
India is heavily dependent on the import of crude oil and natural gas for use as energy sources.
India’s present requirement for crude oil is around 250 million tonnes per annum, while domestic production is only around 30 million tonnes per annum. Therefore, approximately 220 million tonnes of crude oil per annum are imported.
India’s present requirement for natural gas is around 75 billion cubic metres per annum, while domestic production is only around 35 billion cubic metres per annum. Therefore, approximately 40 billion cubic metres of natural gas per annum are imported.
Domestic production of crude oil and natural gas has remained virtually stagnant over the last several years and is likely to increase only marginally in the coming years, despite the government’s proactive policies to boost domestic production.
The consumption of crude oil and natural gas is steadily increasing by 7% per annum, and consequently, imports also need to increase at the same rate.
The global prices of crude oil and natural gas fluctuate due to geopolitical factors, and any increase in these prices causes serious problems for India due to the heavy outflow of foreign exchange.
India has large deposits of coal, which is an alternative fuel. In recent years, domestic coal production has increased significantly, with output likely to reach 1,000 million tonnes per annum in the next few years due to several proactive measures and policies initiated by the Government of India over the last decade. Around 60% of power generation in India is fuelled by coal.
Environmental Issues
Crude oil and natural gas are used as feedstock for the production of derivative products and as fuel, such as diesel, furnace oil, and petrol. The use of these fossil fuels for transportation, industrial processes, and power generation leads to the emission of harmful gases such as carbon dioxide, sulphur dioxide, nitrogen oxides, and methane.
Using coal as fuel for power generation and other purposes also results in the emission of such noxious gases.
The emission of these gases negatively impacts the climate and causes global warming, which could lead to disastrous consequences.
India has pledged at the global climate conference that it will achieve net-zero emissions of these gases by 2070. This means that the use of petroleum-based fuels and coal must be completely stopped. Under the present conditions, it is difficult to imagine a scenario where India can stop using petroleum fuels and coal in the next few decades.
Alternative Eco-Friendly Fuels
While the challenges facing India’s energy sector are daunting, there are opportunities to overcome the impending energy crisis and reduce the emission of harmful gases by initiating appropriate measures.
The Government of India has taken several steps to develop and install capacity for generating energy from alternative sources that do not rely on fossil fuels. However, it remains doubtful whether these alternatives can completely eliminate the need for fossil fuels.
Renewable Energy (Solar, Wind, and Hydropower)
Over the last ten years, the capacity for renewable energy, particularly solar and wind power, has substantially increased, and now stands at around 185 GW. India has set a target of increasing renewable energy capacity to 500 GW by 2030. In the financial year 2024, renewable power capacity grew by 4%.
However, renewable energy sources such as solar, wind, and hydro are seasonal and dependent on weather conditions. Additionally, the capacity utilization of the renewable power industry is only around 20% or less, compared to 60% for thermal power based on coal.
Nuclear Power
In addition to renewable energy, India is aiming to significantly increase nuclear power generation, especially since it does not cause emissions and does not require conventional fuels like petroleum or coal. India’s current nuclear power capacity is 7,480 MW. As of July 2024, India has 21 reactors under construction, with a total capacity of 15,300 MW.
However, environmentalists have raised concerns about nuclear power due to safety issues and the disposal of nuclear waste. These protests often lead to delays in the selection of sites and the construction of projects.
Green Hydrogen Project
The Government of India is focusing on green hydrogen projects, where green hydrogen is produced from water using electrolysis. Green hydrogen is an eco-friendly source for power generation.
At present, India generates a significant amount of hydrogen using natural gas or crude oil as feedstock.
While green hydrogen avoids the use of crude oil, natural gas, or coal as feedstock, the production cost of green hydrogen is currently several times higher than hydrogen produced from natural gas or crude oil.
It is necessary to ensure that the production cost of green hydrogen is reduced to the level of hydrogen from fossil fuels. At present, this appears to be a difficult task, though several technological efforts have been initiated to reduce production costs. For now, one can only wait and see how this unfolds.
Biofuel
There are excellent prospects for producing biofuel from various natural sources.
Algae biofuel is particularly suitable for India, as it can be produced from algae crops, which require only wastewater and sunlight and use carbon dioxide for growth. India’s climate is highly suitable for algae cultivation, which can take place on wastelands, avoiding conflicts with food crop production.
However, efforts to produce algae biofuel in India have been inadequate.
Ethanol
The government has taken steps to blend ethanol with petrol to reduce petrol consumption, which also benefits the environment. However, some observers have expressed doubts about whether this is appropriate, as ethanol can be used as a building block for the production of several derivative products that are currently produced from coal or natural gas. Furthermore, in its eagerness to boost ethanol production, the Government of India has permitted ethanol to be produced from food crops such as rice and maize, raising concerns about food security in a country with a growing population.
Ethanol can also be produced from sugarcane or beet molasses. Beet crops require much less water and can be harvested in half the time of sugarcane. However, no significant steps have been taken in India to promote the cultivation of beet crops. This represents an opportunity that has not yet received adequate attention.
N. S. Venkataraman is a trustee with the "Nandini Voice for the Deprived," a not-for-profit organization that aims to highlight the problems of downtrodden and deprived people and support their cause and to promote probity and ethical values in private and public life and to deliberate on socio-economic issues in a dispassionate and objective manner.
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