(Original title: India is being poured cold water: the opponent is China)

Wen, Observer Network, Wang Yi

Amid the wave of global energy transformation, India has proposed a national plan to occupy nearly 10% of the global market share by 2030 and build a global green hydrogen export center. However, the Nikkei Asia Review poured cold water on India's "ambitious" plan on August 27, saying bluntly that the country is facing an awesome opponent that has already established comprehensive advantages in clean energy industries such as photovoltaics and wind energy and is steadily advancing the green hydrogen industry-China.

India proposes a national plan to build a global green hydrogen export center. The picture shows the 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.

According to the "National Green Hydrogen Mission" approved by India in 2022, the country plans to annual output of 5 million tons of green hydrogen by 2030, accounting for about 10% of the global market, at which time, the plan is expected to invest a total of 8 billion rubles (approximately RMB 6.5 billion), create more than 600,000 jobs, reduce fossil fuel imports by more than 1 billion rubles, and reduce carbon emissions by 50 million tons annually.

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.

In July, India's share of non-fossil energy installations broke 50% for the first time, five years ahead of the planned goal, coupled with increasing policy support from the Indian government and international cooperation, India's industry is confident in the green hydrogen prospects.

"From our perspective, the opportunity is huge," said Agarwal, managing director of Greenzo Energy, an Indian green hydrogen technology company. With India's natural strengths in solar and wind power, coupled with a growing industrial base and government support, India has the ability to build a globally competitive hydrogen economy.

Electrolyzer equipment manufactured by Greenzo Energy, an Indian green hydrogen technology company (Photo/Company provided to Nikkei Asian Review)

According to the report, India¡¯s ambition is not only to build domestic production capacity, but also to build foreign demand. The Indian government is working to find international partners. At the second India-EU Green Hydrogen Forum, the two sides agreed to set up a working group to speed up hydrogen 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 this cooperation is crucial for India¡¯s conversion of production capacity to exports, especially as other international competitors such as Australia, the Middle East and Latin America are also actively developing their own green hydrogen industry.

"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 a report by China Petrochemical News on August 26, China Petrochemical recently signed an engineering contract with Saudi International Power and Water Company (ACWA Power). Guangzhou Engineering Company, a wholly-owned subsidiary of Sinopec Refining and Chemical Engineering Group (SEG), will form a consortium with a Spanish company to provide preliminary engineering services for the project. After completion, the project will become the world's largest green hydrogen/green ammonia production complex, effectively promoting the large-scale development and application of green hydrogen/green ammonia technology and assisting 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.

The report pointed out that China occupies a dominant position in clean energy fields such as solar energy, and the outside world questions whether India will repeat the same mistakes in the green hydrogen industry. In the first half of this year alone, China added 212 GW of solar capacity, more than double India's total installed last year.

And while India has been trying to build up its own production capacity, its reliance on Chinese components has been growing. EMBER, an independent energy think-tank, found that India accounted for more than half of the increase in Chinese solar cell exports last year.

Still, India insists it has learnt lessons from the triumph of China's solar industry. Executives in India told the Nikkei Asian Review that to break through in clean energy exports, they had to be nimble, diversify and work in both intermediate and finished goods markets. Just as China has established a strong position in photovoltaic wafers and cells, they argue, India is trying to make a difference with green hydrogen exports.

Characteristics of hydrogen fuel cell vehicles (Characteristics of EE Power)

Agarwal said with great confidence: "This competition is not just a battle for scale, but also about whether a diverse, inclusive and reliable green hydrogen ecosystem can be established-at this 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.

India¡¯s grid infrastructure has a bottleneck, energy storage costs are high, land access is difficult, and electrolysis technology needs to breakthrough.Prakash noted that policy and regulatory frameworks are still developing, which brings uncertainty to investors, ¡°to overcome these obstacles, green hydrogen can become India¡¯s truly viable and competitive energy carrier.¡±