India has been taking slow and steady strides in the green hydrogen space with a desire to establish itself as a leader in this space globally. High production costs of green hydrogen, however, would perhaps limit its playing field to large corporations only, which will tend to edge out smaller firms.
The production of green hydrogen is capital-intensive; it requires large and repeated investments in both technology and infrastructure. This financial barrier becomes very restrictive for entry except for the well-established companies with deep pockets. According to the Council on Energy, Environment and Water report, India currently produces green hydrogen at a cost between $4.10 and $7 per kilogram. It would need to come down to about $2 per kilogram to be globally competitive.
Scale Economies Give the Upper Hand
Large-scale firms in most big industries of scale economies allow them to produce green hydrogen more cheaply than smaller competitors. The companies maintain the lead in this market, continuing to invest even more in renewables—large projects and innovative technologies—further bringing down costs of production.
Government Policies/Initiatives and Market Dynamics
The Indian government has come up with activities just like the National Green Hydrogen Mission to energize the generation of green hydrogen. It points to develop India as a worldwide center for the generation and trade of green hydrogen, focusing on the generation of 5 million tons of green hydrogen by 2030.
Whereas these endeavors are promising, tall costs stay the major obstacle for smaller firms that deliver green hydrogen. Without sufficient capital to create enormous ventures, it is very outlandish for a little firm to be able to compete with monster organizations.
For India to create a assorted and competitive green hydrogen division, it is important that the tall costs of passage confronting littler firms are tended to. This may be through budgetary motivations, encouraging get to to innovation, and making strong arrangements that energize cooperation from companies of all sizes.
Within the last examination, whereas India’s green hydrogen desire are praiseworthy, the sector’s comprehensiveness and competitiveness will most certainly request concerted endeavors to bring down the cost of generation and the require for back of little industry players.
