Hydrogen Fuel Cell Technology: Hurdles remain in the way of mass use

Among other issues, there is a need to reduce the cost of hydrogen fuel cells if the promise of technology is to be realised

By:July 19, 2021 8:25 AM

The announcement by Reliance Industries of a plan to enter the production of hydrogen fuel cells and set up an electrolyser manufacturing plant in Jamnagar, Gujarat, has put the spotlight back on this emerging technology, which is believed to have the potential to revolutionise mass mobility, power, and heavy manufacturing sectors, with The Energy and Resources Institute (TERI) holding that hydrogen produced from renewable energy (RE) could be the next ‘clean energy prize’.

However, experts say some ground remains to be covered before this optimistic scenario is realised. For, hydrogen produced from RE is costlier than fossil fuels and hydrogen produced from other sources. Says Debasish Mishra, partner at Deloitte in India, “while fossil fuels and hydrogen produced from sources other than renewables cost anywhere between $1.4 and $2.5 per kg, green hydrogen costs around $3.5-4.5 per kg. A reduction of $1 per kg in the cost of green hydrogen would make it comparable to natural gas prices in India.”

Most of the hydrogen produced in India at present is sourced from fossil fuels using the steam methane reforming (SMR) method, and coal gasification method. Since this undercuts the green agenda, electrolysers are now being used for the purpose, with water being heated at a very high temperature with renewable energy. It is the costs involved in this process that are prohibitive at present.

Besides, there is the issue of efficiency losses. “Using electricity to produce hydrogen and then compressing, storing, and converting it back into electricity using a fuel cell can result in almost 60% loss of the original energy content,” Mishra says.

Experts say a 50% reduction in the present capital expenditure on electrolysers, which includes debt service and repair and maintenance costs; levelised cost of electricity (LCOE) from renewable sources; and an improvement in the utilisation levels would help increase the adaptability of green hydrogen. Striking a positive note, Somesh Kumar, partner and leader, energy & utility at E&Y says, “The cost of green hydrogen vis-a-vis fossil fuels and grey hydrogen will drop with serious global efforts to cut the cost of electrolysers using a different set of metals. We are likely to soon find affordable techniques to produce it, helping cut down on carbon emissions”.

As far as India is concerned, there are also issues of uncertainty on the policy front, value chain complexity, and infrastructural challenges on storage, liquefaction, transport, and refilling to reckon with. In a positive development, the Ministry of New and Renewable Energy (MNRE) has recently circulated a draft ‘National Hydrogen Energy Mission’ document for inter-ministerial consultation, aiming to create a hydrogen value-chain in the country and bring down the costs of hydrogen production.

The technology also needs a boost from the demand end. Imposing sectoral obligations to replace grey hydrogen with green hydrogen, allowing 10-15% blending of hydrogen into the gas grid, creation of dedicated hydrogen pipeline and incentivising end-user sectors are steps which would help in this regard.

Other Indian majors besides RIL are investing in the technology. NTPC has invited a tender for hydrogen fuel cell buses to be deployed in Delhi and Leh. It has also signed an MoU with UT, Ladakh and Ladakh Autonomous Hill Development Council for the generation of green hydrogen and its use in buses. Tata Motors has won an order to supply 15 hydrogen based proton exchange membrane (PEM) fuel cell buses. It is also collaborating with IOCL on R&D projects.

“There is a need to consider government intervention and public-private partnerships for use of hydrogen in road transport, since a network of refuelling stations would be needed for the mass adoption of Fuel Cell Electric Vehicles (FCEVs), and investment in such infrastructure has been limited,” Mishra says.

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