Green hydrogen is globally being seen as a promising avenue for driving decarbonization. India too has an important opportunity to tap into hydrogen’s vast potential. The recently announced National Hydrogen Mission provides a timely boost in this regard. In particular, green hydrogen can help decarbonize a range of energy-intensive sectors in India, including steel production, which is currently responsible for the bulk of the manufacturing sector’s GHG emissions.
A Shakti-supported study Greening Steel : Moving to Clean Steelmaking Using Hydrogen and Renewable Energy contributes to the discourse by identifying ways to green the steel sector using hydrogen and renewable energy. It provides insights into the techno-economics of doing so along with the associated environmental benefits.
Key Findings:
- A 100% green hydrogen operation would be commercially viable only by 2040.
- Access to both wind and solar resources is imperative to achieve the lowest production cost.
- The major challenge in transitioning to green hydrogen based steel production is high investment (USD 3 billion per MTPA, more than three times the conventional BF-BoF route), and thin R&D and innovation initiatives by steelmakers (less than 1 percent of their annual turnover).
- Converting the steel output of 111 MT (India’s production in 2019) to green hydrogen based production will require 264 GW of solar capacity, 3,4 million acre of land, and 325 MT water.
- Green steelmaking breaks even with BF-BoF process at hydrogen price of 1.3 – 2.2 USD/kg
- Green steelmaking at wind-solar hybrid locations becomes competitive by 2040 and at solar only locations only in 2050
- Blending grey with green hydrogen and renewable power with grid electricity will accelerate the transition to green hydrogen-based steel production in India. At today’s prices, blending ~9 per cent green hydrogen with grey hydrogen is competitive with the upper range of BF-BOF costs.
The study was launched in the presence of Shri R K Singh, Union Minister for Power and New and Renewable Energy at a CEEW hosted event “A Multilateral Approach to Building a Global Hydrogen Economy” held on 8th September 2021. The Minister underscored the government’s commitment to “creating a green hydrogen economy that operates at scale, just like we did for renewables.” The event also saw the launch of the CEEW publication, Speed and Scale for Disruptive Climate Technologies: Case for a Global Green Hydrogen Alliance.