(Original title: India is sprinkled with cold water: the opponent is China)

Wen Observer.com Wang Yi

In the midst of the global energy transition, India has proposed a national plan to capture nearly 10% of the global market share by 2030 and create a global green hydrogen export center. But the Nikkei Asian Review on August 27 poured cold water on India's "ambitious" plans, bluntly stating that the country is facing a formidable opponent - China - who has already established comprehensive advantages in clean energy industries such as photovoltaics and wind energy and is steadily advancing the green hydrogen industry.

India proposes national plan to build a global green hydrogen export centre, chart as a green hydrogen project (data map)

¡°We want not only to make India a major producer, but also a global hub for green hydrogen exports,¡± India¡¯s State Minister for Electricity, New Energy and Renewable Energy, Shripad Naik, said at a business conference in New Delhi last week.

Under India's National Green Hydrogen Mission, approved in 2022, the country aims to produce 5 million tonnes of green hydrogen per year by 2030, accounting for about 10% of the global market. By then, the plan expects total investment of 8 billion rupees (about 653 million yuan), the creation of more than 600,000 jobs, the reduction of fossil fuel imports by more than 1 billion rupees, and the reduction of carbon emissions by 50 million tons per year.

Hong Kong's South China Morning Post said on the 27th that part of India's green hydrogen project is due to its dependence on crude oil imports. For a long time, crude oil imports have put pressure on its foreign exchange reserves.

Naike said that "substantial progress has been made" in advancing the green hydrogen mission. 19 companies have approved an annual production capacity of 862,000 tons, and 15 companies have obtained orders for 3000 MW electrolytic cell manufacturing capacity. Several states such as Gujarat, Maharashtra, and Tamil Nadu have introduced hydrogen energy policies to provide land, water and power reserve support to attract investment.

A report published last week by accounting firm Ernst & Young predicted that the cost of green hydrogen production in India will fall by about 40% by 2030, to between $3 and $3.75 per kilogram, driven by lower transmission charges, taxes and fees, as well as electrolyzer costs.

The Nikkei Asian Review pointed out that in July this year, India's non-fossil energy installed capacity exceeded 50% for the first time, five years ahead of the scheduled target. Coupled with the increasing policy support and international cooperation of the Indian government, the Indian industry is full of confidence in the future of green hydrogen.

According to Agarwal, CEO of Greenzo Energy, India¡¯s green hydrogen technology company, India has the potential to build a hydrogen economy that is globally competitive with its natural advantages in solar and wind power, coupled with a growing industrial base and government support.

Electrolysis tanks manufactured by Greenzo Energy, India¡¯s green hydrogen technology company (Figure/Company provided to the Daily Asia Review)

The report pointed out that India's ambition lies not only in domestic production capacity, but also in building foreign demand. The Indian government is working hard to find international partners. At the second India-EU Green Hydrogen Energy Forum, both sides agreed to establish a working group to accelerate hydrogen energy trade, standards and investment.

In May, Andhra Pradesh-based company Juno JouleGreen Energy signed a $1.30 billion deal with German energy trader SET Select Energy to build green hydrogen and ammonia export facilities in Andhra Pradesh. Indian industrial giants Adani Group and Reliance Industries have also announced multibillion-dollar investment plans to build green hydrogen production facilities across India.

Analysts say such cooperation is crucial for India to convert capacity into exports, especially as other international competitors such as Australia, the Middle East, and Latin America are also actively developing their own green hydrogen industries.

"But India's main competitor is undoubtedly China." The Nikkei Asia Review pointed out that with its manufacturing strength and the astonishing speed at which renewable energy is introduced, China has been at the forefront of the green hydrogen field.

According to the "China Petrochemistry" on August 26, China Petrochemistry recently signed a construction contract with the Saudi International Power and Water Company (ACWA Power), China Petrochemistry Refinery Engineering Group (SEG) wholly-owned subsidiary Guangzhou Engineering Company will form a joint venture with Spanish companies to provide preliminary engineering services for the project. After the project is built, it will become the world's largest green hydrogen / green ammonia production complex, effectively promote the scaled development and application of green hydrogen / green ammonia technology, and contribute to the global energy transformation.

Independent energy analyst Verma analyzed that China has significant advantages over India in terms of scale, infrastructure and cost competitiveness. The cost of electrolysis cells in China is almost 1/3 of the import price of India. Although India has rich solar and wind energy potential, electrolysis cell production capacity is still in its infancy and production costs are still high.

China's dominance in clean energy such as solar energy, the outside world questioned whether India would repeat the same in the green hydrogen industry.In the first half of this year alone, China added a new solar installation capacity of 212 gigawatts, which is more than twice the total installed capacity of India last year.

Moreover, despite efforts to boost domestic production capacity, India¡¯s dependence on Chinese components has increased.The independent energy think tankEMBER found that India contributed more than half of China¡¯s solar cell export growth last year.

Still, India insists it has learned lessons from the success of China's solar industry. Indian business executives told the Nikkei Asia Review that if they want to break through in clean energy exports, they must remain flexible, promote diversification, and work hard in both intermediate and finished goods markets. They believe that just as China has established a solid position in photovoltaic chips and batteries, India is also trying to open up the situation through green hydrogen exports.

The picture shows the schematic diagram of a hydrogen fuel cell vehicle (Picture/EE Power)

Agaval said with confidence: ¡°This competition is not just about scale, it¡¯s more about building a diversified, inclusive and reliable green hydrogen ecosystem ¨C at which point India is rapidly narrowing the gap with China.¡±

However, Anjal Prakash, director of research at the Indian Business School, told the South China Morning Post that India has ambitions to unleash the potential of green energy and reduce imports of fossil fuels, but the speed depends on multiple factors such as investment, technology and policy support.

However, India's power grid infrastructure has bottlenecks, energy storage costs are high, land acquisition is difficult, and electrolysis technology urgently needs breakthroughs. Prakash pointed out that the policy and regulatory framework is also still developing, which creates uncertainty for investors. "These obstacles are to be overcome for green hydrogen to become a truly viable and competitive energy carrier in India."