Leveraging natural gas to usher in the green hydrogen era

A 150 million tonnes capacity addition primarily based on coal is being targeted by 2030 to propel our economic growth through manufacturing, requiring investments to the tune of Rs 5,000 crore per million tonnes of steel capacity. (Representative image)

By Hemant Mallya & Tirtha Biswas

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Natural gas currently has a 6.6% share in India’s energy mix and is targeted to increase to 15% by 2030. Natural gas is the cleanest fossil fuel and has wide usage across power, industry and transport sectors, but only has a 40% smaller emission-footprint than coal. Splitting water using renewable energy to produce green hydrogen is expected to be a viable cost-competitive and carbon-neutral energy source, but only by 2040. Green hydrogen can displace natural gas wholly or partly in all sectors. Therefore, it is critical to strictly position natural gas as a transition fuel for immediate GHG reductions and enable the entry of hydrogen in a decade. Three broad measures need to be prioritised – first, deploying technologies in industry and transport that use natural gas now but are hydrogen-ready; second, adapting natural gas infrastructure to hydrogen; and third, utilising natural gas for producing hydrogen to kickstart the green hydrogen ecosystem.

First, we need to invest in technologies that can readily transition to hydrogen. Steel manufacturing currently consumes 14% of the total delivered energy. A 150 million tonnes capacity addition primarily based on coal is being targeted by 2030 to propel our economic growth through manufacturing, requiring investments to the tune of Rs 5,000 crore per million tonnes of steel capacity. It takes 40-50 years to recover these costs. Coal-based technologies have limited potential to blend hydrogen in the existing process. Current commercial steel-making technology can switch between natural gas and hydrogen (and all intermediate blends) to produce steel. It is essential to deploy this technology for all new capacity additions. This will reduce the overall carbon intensity of the steel industry, and green hydrogen can eventually be introduced as it becomes cost-competitive with natural gas.

Equipment such as boilers, furnaces, and heaters that have widespread use across industrial sectors for hot water, steam, and heat currently use furnace oil, coal, and pet coke. While many of them can be electrified, hydrogen is the only potential long-term solution for applications requiring high-grade heat. Again, natural gas equipment needs to be deployed that can utilise a blend with hydrogen. Depending on the technology, up to 20% blending of hydrogen is possible. Similarly, compressed natural gas blended with hydrogen (H-CNG) technology is being piloted in the transport sector and should be promoted.

Second, India has 17,000 km of natural gas transmission pipelines, and there are plans to add another 15,000 km in the coming decade. This provides an opportunity to deploy hydrogen-ready pipelines and associated infrastructure. Pipelines typically have a lifetime of over 40-50 years, and the turnover is slow. Thus, planning for future hydrogen-ready pipelines today is critical. New pipe should all be hydrogen corrosion-resistant through use of better grade steel. Existing pipe can be gradually made hydrogen resistant over the next decade through scheduled adaptation programs. This will spread out the cost of such a transition over many years. Further, a significant share of this adaptation cost would then be borne by natural gas now, thus enabling the entry of hydrogen in the future.

Third, green hydrogen is currently at least three and seven times as expensive as natural gas and coal, respectively, per unit of energy. But we need to build an ecosystem to absorb green hydrogen when it becomes cost-competitive with fossil fuels. However, the ecosystem will not materialise until there is a demand for hydrogen. Natural gas can also be utilised in new technologies that produce hydrogen and solid carbon (black). This eliminates carbon dioxide emissions and produces a useful by-product. Hydrogen so derived will be competitive with green hydrogen and can be utilised to build demand for green hydrogen of the future. In the green-hydrogen economy story, the journey will be as important as the destination itself. If planned well, natural gas can play the role of a bridge fuel and not act as a barrier to the entry of green hydrogen. On the contrary, stigmatising natural gas will only lock in more of the existing dirtier fossil fuels, further delaying the entry of green hydrogen.

Mallya is senior programme lead, and Biswas is programme lead, Council on Energy, Environment and Water (CEEW)