February 29, 2024 [Oil Price]- India could become a key market player in the global green hydrogen industry, which is set to create $500 billion in economic opportunities, consulting firm Alvarez & Marsal said in a new report this week.
India could be at the forefront of green hydrogen development, thanks to its competitiveness in producing clean energy — abundant renewable energy resources, manufacturing competitiveness, and low cost of capital, according to the consultancy.
Countries rich in renewable energy resources like solar and wind are well-placed to take advantage of the green hydrogen opportunity, says Alvarez & Marsal. These countries include India, Egypt, Chile, Argentina, Saudi Arabia, the United Arab Emirates (UAE), the Chinese mainland, Australia, and the United States.
“The UAE, India, and Saudi Arabia seem well placed in global green hydrogen competitiveness and therefore could partake a significant share of global trade,” Alvarez & Marsal analysts wrote in the report.
On the other hand, the EU, Japan, and South Korea could be the early adopters of hydrogen on the demand side with imports around 2030, according to the consultancy.
While heavy industry and governments pin their hopes on hydrogen for faster decarbonization, and power-generating companies and oil and gas majors look to diversify into low-carbon hydrogen production, costs are still high for green hydrogen production and hold back massive deployment of projects, analysts say.
Forecasters, including the International Energy Agency (IEA)—a staunch supporter of all things green – acknowledge that costs need to be slashed significantly if clean hydrogen is to play a major role in the energy transition.
Green hydrogen—currently costing 3 euros to 8 euros per kg in some regions—is more expensive than ‘grey’ hydrogen, produced from natural gas, PwC said in an analysis last year.
“Low-emission hydrogen production can grow massively by 2030 but cost challenges are hampering deployment,” the IEA said in its Global Hydrogen Review 2023 report in September 2023.
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