Ten years since the solar revolution began in the country, prices have dropped to a historic low of Rs 1.99 per kilowatt-hour (kWh). The revolution was made possible by the coming together of many elements, mainly forward-looking policies for a conducive market to inspire the confidence of private players and streamlining of bureaucratic processes.
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A similar approach is needed to increase the contribution of green hydrogen in India’s energy mix. At the moment, India imports 85 per cent of its crude oil, 24 per cent of coal, and 54 per cent of gas requirements.
Currently, India consumes about 6 million metric tonnes of grey hydrogen per annum, which is about 8.5 per cent of the global hydrogen demand. Increasing the share of hydrogen in the country’s energy mix would take it towards greater self-reliance in its energy needs.
Further, an emphasis on green hydrogen would help reduce carbon emissions and take India closer to meeting its climate change commitments. A good approach would be to increase the share of hydrogen in the short run — not overly concerned about grey, blue, or green. However, as its use picks up, our efforts should move towards a higher share of green hydrogen.
The growth of solar has given a unique advantage for the growth of green hydrogen. Cheap solar tariffs mean the cost of powering the electrolysis process through surplus electricity at peak hours to generate hydrogen remains low. Setting up hydrogen generation plants near solar parks will further reduce transmission costs.
Proactive industry collaboration with the government is key to creating a hydrogen economy in India. This will help bring best-in-class hydrogen technology, equipment, and know-how to create a hydrogen supply chain in India — in many cases, these could be “Made in India”. By prioritising national hydrogen demonstration projects, innovations to further reduce the cost of hydrogen will become prominent locally.
Hydrogen, a versatile fuel, has applications across sectors. This means several ministries need to be involved in the framing of policies and increase adoption of green hydrogen in their respective segments. The Government of India should consider setting up a multi-agency mission to bring multiple ministries, private industry and academia together in a partnership to scale up the deployment of hydrogen across sectors and industries.
Having a clear mid-term and long-term target inspires confidence in the private sector to make their investments in a new energy source. India should increase this demand and aspire to meet at least 4 per cent of its energy demands by hydrogen by 2030.
This would represent about 13 million metric tonnes of hydrogen demand by 2030. A target for 2050 of about 10-12 per cent hydrogen within the energy mix could also be recommended to ensure long-term supply-demand creation whilst further instilling confidence in the market.
For the quick adaptation of hydrogen as a source of energy, the Government of India should incentivise private players to make electrolysers cheaper. Furthermore, the annually collected cess tax for coal (approximately Rs 24,000 crore), currently used in various projects for the expansion of India’s RE capacity, should be utilised to fund research on newer hydrogen technologies as well. Existing subsidies from schemes like FAME II for electric vehicles should be extended to fuel-cell electric vehicles.
Tax benefits that solar and wind receive should be extended to all players in the green hydrogen ecosystem. In the short term, the price of hydrogen generated through steam methane reformation should be capped — ideally at Rs 17 per kg. This enables hydrogen production at a cost of Rs 260 per kg. Generating hydrogen from biomass should also be incentivised as it also has the potential to increase farmer incomes. In addition, some of the key policy reforms include:
To kickstart demand, policies should also mandate the use of Green Hydrogen. For example, industries such as fertiliser, steel, and oil refineries should be mandated to meet 10 per cent of their energy by green hydrogen.
The cost of transmission of electricity from solar parks to hydrogen generation facilities should be kept minimum, ideally not more than 50p per kWh.
Like how fixed prices were paid earlier to renewable electricity integration into the electric grid, feed-in tariffs should be set for private players to integrate green hydrogen into the natural gas grid.
Reverse auctioning of the per-unit cost of solar energy was key to the growth of solar. Taking up the responsibility to set up logistics, the Centre put out bids for buying solar energy and chose the cheapest bidder. This triggered a massive price drop — from Rs 7 to Rs 4 as soon as reverse auctioning began.
Green hydrogen is one of the most promising fuels in the efforts to reduce carbon emissions. India should aim to reduce the cost of hydrogen to less than $2 by 2030. By doing so, the demand is expected to increase by at least five times today’s demand to 30 million tonnes per annum by 2050.
The year 2020 saw 20 countries, including Australia, Canada, the USA, Japan, and Germany, announce hydrogen policies. India should ramp up international collaborations for more effortless transfer of technology and resources related to hydrogen. Low solar prices coupled with pragmatic policies can help India take a leadership position in driving the global hydrogen economy.
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- In the Large States category (overall), Chhattisgarh ranks 1st, followed by Odisha and Telangana, whereas, towards the bottom are Maharashtra at 16th, Assam at 17th and Gujarat at 18th. Gujarat is one State that has seen startling performance ranking 5th in the PAI 2021 Index outperforming traditionally good performing States like Andhra Pradesh and Karnataka, but ranks last in terms of Delta
- In the Small States category (overall), Nagaland tops, followed by Mizoram and Tripura. Towards the tail end of the overall Delta ranking is Uttarakhand (9th), Arunachal Pradesh (10th) and Meghalaya (11th). Nagaland despite being a poor performer in the PAI 2021 Index has come out to be the top performer in Delta, similarly, Mizoram’s performance in Delta is also reflected in it’s ranking in the PAI 2021 Index
- In terms of Equity, in the Large States category, Chhattisgarh has the best Delta rate on Equity indicators, this is also reflected in the performance of Chhattisgarh in the Equity Pillar where it ranks 4th. Following Chhattisgarh is Odisha ranking 2nd in Delta-Equity ranking, but ranks 17th in the Equity Pillar of PAI 2021. Telangana ranks 3rd in Delta-Equity ranking even though it is not a top performer in this Pillar in the overall PAI 2021 Index. Jharkhand (16th), Uttar Pradesh (17th) and Assam (18th) rank at the bottom with Uttar Pradesh’s performance in line with the PAI 2021 Index
- Odisha and Nagaland have shown the best year-on-year improvement under 12 Key Development indicators.
- In the 60:40 division States, the top three performers are Kerala, Goa and Tamil Nadu and, the bottom three performers are Uttar Pradesh, Jharkhand and Bihar.
- In the 90:10 division States, the top three performers were Himachal Pradesh, Sikkim and Mizoram; and, the bottom three performers are Manipur, Assam and Meghalaya.
- Among the 60:40 division States, Orissa, Chhattisgarh and Madhya Pradesh are the top three performers and Tamil Nadu, Telangana and Delhi appear as the bottom three performers.
- Among the 90:10 division States, the top three performers are Manipur, Arunachal Pradesh and Nagaland; and, the bottom three performers are Jammu and Kashmir, Uttarakhand and Himachal Pradesh
- Among the 60:40 division States, Goa, West Bengal and Delhi appear as the top three performers and Andhra Pradesh, Telangana and Bihar appear as the bottom three performers.
- Among the 90:10 division States, Mizoram, Himachal Pradesh and Tripura were the top three performers and Jammu & Kashmir, Nagaland and Arunachal Pradesh were the bottom three performers
- West Bengal, Bihar and Tamil Nadu were the top three States amongst the 60:40 division States; while Haryana, Punjab and Rajasthan appeared as the bottom three performers
- In the case of 90:10 division States, Mizoram, Assam and Tripura were the top three performers and Nagaland, Jammu & Kashmir and Uttarakhand featured as the bottom three
- Among the 60:40 division States, the top three performers are Kerala, Andhra Pradesh and Orissa and the bottom three performers are Madhya Pradesh, Jharkhand and Goa
- In the 90:10 division States, the top three performers are Mizoram, Sikkim and Nagaland and the bottom three performers are Manipur and Assam
In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)