Budget 2021: Green Energy Highlights – The Big Picture – RSTV IAS UPSC

  • IASbaba
  • April 23, 2021
  • 0
The Big Picture- RSTV, UPSC Articles
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TOPIC: General Studies 3

  • Green Energy
  • Environment, Climate Change

In News: Budget 2021 has proposed the launch of Hydrogen Energy Mission in this fiscal year.

  • Hydrogen energy technologies across the world have still not become commercially viable, but the energy source is seen as the next big thing as its usage would lead to zero emissions. With the announcement, India has joined the race for producing the next big energy source.
  • The emphasis on hydrogen in the budget was in line with the technological development in the global north and with a long-term vision towards reduced dependency on minerals and rare-earth element-based battery as energy storage.
  • Germany and many other EU countries have already set an ambitious green hydrogen policy. Even countries like UAE and Australia that are traditionally considered as the laggards of climate action have moved towards green hydrogen

Hydrogen Energy Mission (Hydrogen Economy)

To be launched in 2021-22 for generating hydrogen from green power sources

The demand: Demand for hydrogen is at around 6 metric tonne (MT) per annum, mainly from industry sectors, such as fertilizers and refineries. This can increase to around 28 MT by 2050 mainly due to cost reductions in key technologies and a push to reduce carbon footprint. Demand will mainly grow in steel and road transport, shipping and aviation sectors. The report also projected that India would require 40 MT of green hydrogen to achieve net zero carbon emissions by 2060.

Production: Typically, hydrogen can be produced in one of three ways, i.e., from fossil fuels (grey hydrogen), through carbon capture utilisation & storage (CCUS) application and fossil fuels (blue hydrogen), or by using renewable energy (green hydrogen). In the case of green hydrogen, electricity generated from renewable energy is used to split water into hydrogen and oxygen in an electrolyser. This is by far the cleanest and perhaps the most expensive method of producing hydrogen at the moment. Majority of the hydrogen production in India takes place via fossil fuels and is used primarily in the chemical and petrochemical sectors.

Focussing on the production of green hydrogen in India would mean significantly ramping up the current renewable energy infrastructure across the country.


  • Green Hydrogen Mission is not only essential to decarbonise heavy industries like steel and cement, it also holds the key to clean electric mobility that doesn’t depend on rare minerals.
  • Hydrogen from renewable sources can play a critical role in heavy-duty, long-distance transport. While battery operated electric vehicles (BEV) will become competitive for heavy-duty transport, hydrogen production will be needed. It will also play a critical role in production of ammonia which is currently being produced from fossil-fuel based hydrogen.
  • Green hydrogen energy is vital for India to meet its Nationally Determined Contributions and ensure regional and national energy security, access and availability. Hydrogen can act as an energy storage option, which would be essential to meet intermittencies (of renewable energy) in the future

The Way Forward

  • The rising interest in this supply option is driven by the falling costs of renewable power and by systems integration challenges due to rising shares of variable renewable power supply. The focus is on deployment and learning-by-doing to reduce electrolyser costs and supply chain logistics. This will require funding
  • In terms of challenges to green hydrogen specifically, cost of renewable electricity is the major problem. Public investments need to strategised and channelled well.
  • Policy makers should also consider how to create legislative frameworks that facilitate hydrogen-based sector coupling.
  • Partnerships with government for carrying out research on applications in futuristic areas of the hydrogen energy mission will be critical to its success. 
  • Government’s encouragement to prospective users of green hydrogen can also be in the form of lowering of open-access charges for renewables to address the challenge of reaching out green power from distant project locations.

Connecting the Dots:

  1. Green hydrogen energy technologies come with their own problems. Is India ready? Critically examine.

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