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REPORT
Unlocking India's RE and Green Hydrogen Potential
An Assessment of Land, Water, and Climate Nexus
10 September, 2024 | Industrial Sustainability
Hemant Mallya, Deepak Yadav, Anushka Maheshwari, Nitin Bassi, and Prerna Prabhakar

Suggested citation: Mallya, Hemant, Deepak Yadav, Anushka Maheshwari, Nitin Bassi, and Prerna Prabhakar Unlocking India's RE and Green Hydrogen Potential: An Assessment of Land, Water, and Climate Nexus.. New Delhi: Council on Energy, Environment and Water.

Overview

This report evaluates the potential for renewable energy (solar and wind) and green hydrogen in India. The challenges facing large-scale renewable energy and green hydrogen development primarily relate to land and water issues. This creates a nexus where RE depends on land availability, green hydrogen relies on water resources, and these constraints hinder the full realisation of their generation and production potential. The issues range from population density, existing land conflicts, earthquake zones, land prices and water availability.

This study employs a methodology, dividing the entire Indian landmass into 5 x 5 km rasters (or pixels) and evaluating each raster for its solar and wind resource potential. This potential is then overlaid with land use criteria, exclusion factors, and limiting constraints to calculate the renewable energy potential. The study further assesses green hydrogen production potential by considering water-related constraints. By examining these interlinked challenges of land availability for renewable energy deployment and water resources for green hydrogen production, this report estimates their potential and highlights the tradeoffs between various limiting constraints at a national, state, and union territory level.

Key Findings

  • India has a significant RE potential of over 24,000 GW without applying any constraints.
  • India has an onshore wind potential of 1,790 GW, but about 66 per cent of this potential is in croplands, making large-scale generation challenging. The offshore wind potential of 2,435 GW is limited by depth, with only 30% in areas shallower than 500 meters.
  • The solar potential in India is vast (20,270 GW for PLFs >23% for 30% DC oversizing), but it faces seasonality challenges, with a significant portion experiencing variability in output.
  • Wind-Solar Hybrid (WSH) potential is estimated at 3,699 GW, dominated by solar energy (84%).
  • Earthquake zones and population density pose minimal to moderate impacts on RE potential, but land conflicts remain a significant barrier to realising their full potential.
  • Our analysis indicates about 56 MTPA green hydrogen production capacity, mostly in western and southern India, can be produced in areas that do not face any significant water availability-related issues, although water management may be required.
  • We estimate that India can produce about 40 MTPA of green hydrogen for a cost lower than USD 3.5 per kg. There is significant green hydrogen production capacity at a cost of less than USD 3.5 kg in Gujarat (8.8 MTPA), Karnataka, and Maharashtra (5 MTPA each).

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“Land and water are critical resources for scaling up RE and green hydrogen. Prevention of desertification and innovative solutions to address land availability, such as agro-voltaics in horticulture and rooftop solar in dense Indian cities, will be essential. Moreover, as RE projects move into areas with higher climate risks, insurance companies could increasingly be hesitant to provide coverage. Involving all stakeholders in the early stage of renewable project development and addressing climate risks will help ensure projects are commercially viable in the long run.”

Play The Great Indian RE Challenge

An interactive explainer to understand how multiple challenges could emerge simultaneously as India scales up its RE capacity

Executive Summary

India has committed to achieving net-zero emissions by 2070. Renewable energy (RE), including solar and wind power, as well as green hydrogen, are expected to play a pivotal role in achieving this target. India also has nearer-term goals of achieving 50 per cent non-fossil fuel share in power generation capacity and deploying 500 GW of non-fossil power capacity by 2030 (PIB 2022). In the long run, the Council on Energy, Environment and Water (CEEW) estimates that India will need a solar capacity of over ~5,600 GW and a wind capacity of ~1,800 GW to achieve net-zero emissions by 2070 (Chaturvedi and Malyan 2022). Furthermore, the green hydrogen demand in India in sectors such as fertiliser, refinery, steel, and transportation is expected to reach ~30 million tonnes per annum (MTPA) by 2050 (Kowtham, Pranav, and Clay 2022).

However, large-scale RE and green hydrogen development entails challenges related to land and water access. While RE deployment depends on land availability, green hydrogen relies on water resources. These constraints hinder the full realisation of RE generation and green hydrogen production potential. Solar power, a major renewable source, requires extensive land resources. The current distribution of land use, as well as potential changes therein will determine whether sufficient land is available for widespread RE deployment. Additionally, the location of the available land is crucial, as end users prefer to deploy RE sources locally rather than transmitting power over long distances. Moreover, green hydrogen production requires access to water resources, known as uncommitted water, beyond what is already committed to the agricultural, industrial, domestic, and other sectors. The cost of land and availability of water directly influence the levelised cost of power and hydrogen. Therefore, to meet its net-zero targets, India needs to evaluate the overall potential for RE and green hydrogen and understand the challenges associated with realising this potential.

Our study estimates the potential for solar, wind, and green hydrogen at the national, state, and union territory level. The methodology involves dividing the Indian landmass into 5 × 5 kilometre rasters (or pixels) and evaluating the potential for RE and green hydrogen production in each raster and overlaying this data with land use categories such as crop-lands, mountainous terrain, water bodies, reserve forests, and sandy areas to determine the RE potential. Certain criteria, such as reserve forests, act as exclusion criteria and prevent the deployment of RE. Other criteria, like seismic activity and climate risks, act as constraints that do not prevent RE deployment but increase costs or social impact. We evaluate the RE potential after the application of exclusion criteria and limiting constraints. The RE potential is then layered with water-related constraints to evaluate the green hydrogen potential.

A. India has sufficient RE and green hydrogen potential to achieve net-zero emissions

Unlocking the potential for RE and green hydrogen production in India will require overcoming multiple challenges and constraints imposed by various social, climate, and commercial factors.

RE potential in India and challenges to scaling up

As indicated in Figure ES1, our analysis shows that the bottom-up manufacturing cost of a PEM electrolyser is USD 359 per kW. The electrolyser stack constitutes about 40 per cent of the overall manufacturing cost, while the balance of plant (BoP) covers the remaining 60 per cent.

India has a significant RE potential of over 24,000 GW without applying any constraints. However, not all of this potential can be easily realised given the various constraints that limit deployment. A summary of RE potential and challenges to scaling up is provided below:

  • Onshore wind potential - India has an onshore wind potential of 1,790 GW assuming a hub height of 100 metres and a plant load factor (PLF) equal to or greater than 30 per cent.
    • About 66 per cent of the onshore wind potential is concentrated in crop-lands, 27 per cent in rangelands, and only 7 per cent in bare ground. This indicates challenges in accessing land for large-scale wind generation.
  • Offshore wind potential – India has an offshore wind potential of 2,435 GW, assuming a hub height of 100 metres and a PLF equal to or greater than 30 per cent.
    • Only 30 per cent of offshore wind is located in water less than 500 metres deep. Tapping into the rest of the potential may require floating wind turbine solutions.
  • Solar potential – India has a solar potential of 20,270 GW for a PLF greater than 23 per cent (assuming 30 per cent oversizing).
    • Seasonality in solar – About 17,802 GW of solar capacity in the country experiences high seasonality – that is, more than three months with a PLF less than one standard deviation below the median values for the same location.
  • Wind–solar hybrid (WSH) potential stands at 3,699 GW. Solar energy accounts for 84 per cent of the total WSH potential, at approximately 3,125 GW, while wind energy contributes the remaining 574 GW potential.
  • Earthquake zones have minimal impact on RE potential, with 83 per cent of onshore wind potential and 77 per cent of solar potential located in low to moderate seismic zones (zone 2 or 3).
  • Population density has a significant impact on RE potential. Only 29 per cent of onshore wind potential and 27 per cent of solar potential are located in areas with a population density lower than 250 people per square kilometre. However, social conflicts could arise even in areas with low population densities.
  • Land conflicts can be a significant impediment to realising RE potential in the country. Only about 35 per cent of onshore wind potential and 41 per cent of solar potential are located in areas that have historically not experienced any land conflicts.
  • Climate risk and land prices – Only 18 per cent of onshore wind potential and 22 per cent of solar potential are located in areas with low climate risks and low land prices.

The large-scale deployment of RE in India will require the careful selection of land parcels with minimal constraints and good quality RE.

Land policies and impact on RE

Favourable land policies and provisions are essential for the large-scale development of RE. A review of state-level RE policies indicates that there is no standard format for reporting landrelated provisions.

  • Provisions for land-related issues in RE policies – RE policies in some states lack provisions for land use conversion and land banks, creating an information gap in these states in terms of RE development.
  • Ease of doing business – While provisions for deemed land use conversion are available in most states, the conversion still requires statutory approvals and fee payments.
  • Land transactions – Most states have fully or partially exempted project developers from having to make stamp duty payments for purchasing land. However, of the 12 states analysed, only Jharkhand, Karnataka, Odisha, and Uttar Pradesh have provisions for land banks in their policies.
  • Wastelands – While wastelands are an attractive option for project developers, the RE policies of most states do not include provisions for them.

Levelised cost of electricity for wind and solar generation

Although India has a large RE potential, the cost of power generation will significantly influence how much of it is eventually exploited. RE and green hydrogen have to compete with fossil fuels for widespread acceptance and minimal impact on economic growth. In this analysis, we used land costs and the RE PLF as variables to determine variations in the levelised cost of electricity (LCOE) across the country.

  • Large solar potential exists in Rajasthan (6464 GW), Madhya Pradesh (2978 GW), and Maharashtra (2409 GW) at LCOEs lower than INR 2.8 kwh.
  • Ladakh has a solar potential of ~625 GW at an LCOE lower than INR 2.5 kWh. However, unlocking this potential would be challenging due to the difficult terrain and a lack of power evacuation infrastructure.
  • Karnataka (293 GW), Gujarat (212 GW), and Maharashtra (184 GW) have the largest wind potential in India at an LCOE lower than INR 3.25 per kwh.
  • Tamil Nadu has a significantly lower cost of generation than in other states and union territories due to a high wind PLF, with a potential of 50 GW at an LCOE lower than INR 2.65 per kWh.

B. Green hydrogen potential: nexus with water and cost of production

Green hydrogen capacity and water nexus

WSH provides a longer duration of power supply balancing the intermittency of solar and wind, thus increasing the efficiency of green hydrogen production and lower the costs. Hence, it is the preferred option for producing green hydrogen. Water is required for producing green hydrogen in electrolysers. Our analysis indicates that areas with WSH potential can produce about 80 MTPA of green hydrogen. Approximately 56 MTPA of hydrogen production capacity, mostly in western and southern India, can be realised in areas that do not face significant water availability issues. However, only 25 per cent of the surface water is available yearround, suggesting that storing monsoon water to ensure consistent year-round production would entail additional costs.

Levelised cost of hydrogen across the country

We estimate that India can produce about 40 MTPA of green hydrogen at a cost lower than USD 3.5 per kilogram. This cost is expected to decrease further in the coming years due to a decline in the cost of electrolysers and RE through the introduction of more efficient technologies.

  • There is a significant green hydrogen production potential at a cost of less than USD 3.5 per kilogram in Gujarat (8.8 MTPA) and Karnataka and Maharashtra (5 MTPA each).
  • Rajasthan has significant potential for producing 12 MTPA of green hydrogen, but the cost of production is much higher at USD 3.90 per kilogram, primarily due to the low capacity and PLF of wind power.

C. Challenges in achieving national RE and net-zero targets

The significant RE potential in the country is limited by several constraints. Each location in the country has a different combination of constraints. To achieve net-zero emissions in India by 2070, it may be necessary to establish RE capacity of up to 7,000 GW. Multiple combinations of constraints need to be considered while establishing this generation capacity. We evaluated two such cases, depicted in ES Figures 1 and 2, where we consider the limitations posed by the constraints incrementally when scaling up RE deployment to 7,000 GW. The bars in the chart show the additional RE resulting from the tightening of each constraint and the cumulative RE for each combination of constraints. The constraints are listed to the left in the table below the chart in ES Figure 1, and the level of each constraint is provided below each bar.

Each combination trajectory provides different insights. However, based on the two cases evaluated in ES Figures 1 and 2, we observe some common patterns, as follows:

  • The first 60 GW deployment has no significant constraints.
  • Between 60 GW and 300 GW capacity, the intermittency of RE increases slightly, with locations experiencing two months of generation lower than one standard deviation from the median. Additionally, locations with existing conflicts will have to be used for RE deployment.
  • In the 300–750 GW range, there is a trade-off between significantly higher land prices (between INR 8 and 16 lakhs per acre) and higher population density (between 250 and 400 people per square kilometre). Additionally, areas with higher population density are also associated with higher climate risk and conflicts. The climate risk also increases from 0.2 to 0.4.
  • • Beyond 750–1,500 GW, RE will need to be deployed in areas characterised as earthquakeprone zone 4 or in areas with higher seasonality, where generation is lower than one standard deviation from the median generation for three months. For the 1,500–3,000 GW range, we need to access high population density areas with 400–750 people per square kilometre. Unlocking the 3,000 GW RE potential will also require exploring land resources in high-conflict zones.
  • And finally, beyond 3,000 GW, there is an increase in challenges associated with all constraints, from land price to population density and conflicts. At the extremity of more than 5,000 GW, we need to deploy RE in highly earthquake-prone zones. Additionally, climate risks are quite high in some areas as we reach higher capacity requirements.

Figure ES1 Case 1 for scaling up RE projects in India

Figure ES2 Case 2 for scaling up RE projects in India

D. Challenges in realising the green hydrogen production potential in India

Similar to RE, we also evaluated the challenges posed by various constraints for scaling green hydrogen production. Since this is a burgeoning sector, we assessed the challenges up to a production volume of 50 MTPA, assuming that 5 MTPA will meet immediate domestic demand from existing hydrogen users, while the rest will be used for new applications such as steel production and export markets. We also assume that captive RE for hydrogen production through a WSH will be the predominant approach used for green hydrogen production, as power transmission open access charges and storage costs will make the transmission of RE for green hydrogen production commercially less competitive compared to captive RE.

It is assumed that green hydrogen projects will be set up only in WSH areas due to advantages related to low production costs. ES Figure 3 provides a summary of the incremental challenges associated with the growth of green hydrogen production. The key challenges are as follows:

  • Land price is a challenge for most optimal WSH locations and will influence the levelised cost of hydrogen (LCOH).
  • Most hybrid locations also have high variations in the solar PLF, with at least three months of solar generation that is lower than one standard deviation from the median value in a given year. However, these same locations mostly have a wind PLF higher than 30 per cent, which will likely compensate for the variation in solar generation.
  • To achieve 1.5 MTPA through a hybrid RE arrangement, land with a population density of up to 400 people per square kilometre may need to be developed.
  • To deploy between 1.5 and 8.5 MTPA potential, land with a population density up to 750 people per square kilometre may need to be used. Additionally, the amount of internal uncommitted water available decreases to 1,500 mcm. At higher volumes beyond 3 MTPA, the number of land conflicts increases to between four and six, and the RE must be deployed in areas with high land prices.
  • To increase capacity to 8.5 to 15.5 MTPA annually, land with up to nine conflicts per district will have to be considered.
  • To increase production beyond 15.5 MTPA, land with prices as high as INR 23 lakh per acre must be considered. Closer to 30 MTPA, green hydrogen projects will need to be developed in high-risk earthquake zones. The availability of internal uncommitted water decreases to 750 mcm, but it is still not a concern.

Figure ES3 Scaling up of green hydrogen projects in India will need overcoming multiple challenges

The large-scale deployment of RE for power or green hydrogen will also require a significant amount of land. This could be anywhere between 5.54 and 6.31 per cent of India’s landmass for RE power and 2.45 per cent for green hydrogen production. However, the utilisation of rooftop solar and agro-voltaics can, to some extent, mitigate the land usage issue. Furthermore, we expect photovoltaic (PV) panel efficiency to improve in the future, resulting in lower land requirements

E. Limitations to the analysis

The accuracy of the analysis in this report depends on the quality and vintage of the data that was available in the public domain. There are several limitations to this analysis, as follows:

  • Hyperlocal land variables: Cultural associations, social status and identity, and tenure can limit access to land. These hyperlocal issues were not captured in this study, although they may have a significant impact on land access for realising RE potential.
  • Land prices: Land prices are available in the form of circle rates that do not directly reflect the market rate. Besides, there is no uniformity in how data is reported by each of the states and union territories. Hence, sampling circle rates and converting them to lease costs results in uncertainties that cannot be quantified.
  • Land use and land cover: The land use and land cover (LULC) data come from multiple sources, mostly based on satellite data. However, land use has social nuances such as access and cattle grazing, which can only be captured at the ground level. Hence, the LULC in this analysis does not fully capture the availability of land for RE.
  • Lack of grid network information: The spatial data for the power grid network is not in the public domain. Although this is perhaps the most important factor in developing RE at scale, we were not able to analyse the implications.
  • Green hydrogen costs: The LCOH is estimated using a regression model that relies on a limited number of detailed model runs for specific locations across the country (Biswas, Yadav, and Guhan 2020). Conducting a detailed model run for every relevant raster across the country was not possible due to computing constraints. Consequently, there is uncertainty regarding green hydrogen production costs proportional to the error in the regression model. We also do not capture the increased construction costs in areas with higher seismic activity or elevated climate risks.

F. Recommendations

  • Validate RE and green hydrogen potential using better quality data and on-ground assessments: The analysis in this report is limited by the quality of the data used. Land use is dynamic, and some of the data used in this analysis may not reflect current realities. Therefore, on-ground surveys and refinement of the data will yield accurate estimates of RE and green hydrogen potential.
  • Create graded land banks for RE and green hydrogen projects: States and union territories should establish land banks based on on-ground validation to ensure rapid project development is not hampered to achieve the national targets set for RE and green hydrogen deployment. The land banks can be graded based on the quality of RE, water availability, and connectivity to the power grid and right-of-way (RoW) transport infrastructure such as roads, rail, and pipelines.
  • Encourage the utilisation of existing landholdings for RE development: Several institutions such as the Indian Railways, public sector undertakings, port trusts, defence establishments, special economic zones, state industrial departments, private industries, 8 States should create graded land banks for RE and green hydrogen projects to accelerate India's energy transition educational institutes, and private trusts hold significant land in the country. They can be encouraged to develop RE for their own use or for transmission to the grid.
  • Evaluate grid infrastructure where there is promising RE potential: Large-scale deployment of RE may necessitate grid expansion and capacity enhancement. A detailed evaluation is needed to understand where there is promising RE and green hydrogen capacity and how the grid needs to evolve to meet growing power evacuation needs.
  • Evaluate offshore potential, especially for green hydrogen export: The biggest challenge in tapping offshore wind potential is connecting to the onshore grid. One option to bypass this challenge is to produce green hydrogen and subsequently green ammonia offshore. The green ammonia can potentially be used as a bunkering fuel for ships or exported without the need for bringing it onshore.
  • Evaluate grid resilience and power storage requirements to address seasonality: With the incremental scaling up of RE, locations with higher seasonality, especially in the case of solar energy, will need to be developed. This will directly impact grid resilience and necessitate storage for load balancing. The seasonality of RE and its implications should be evaluated thoroughly
  • Evaluate the potential for agro-voltaics, especially in horticultural areas: About 66,000 GW of solar power potential exists in crop-lands. Not all of these will be suitable for agro-voltaics, but even utilising a fraction of the crop-land for generating RE will substantially contribute to national targets. India had over 28 million hectares of land under horticulture in 2021 with a solar potential of 13875 GW. Agro-voltaics should be explored in crop-lands, particularly in horticultural areas, to increase generation capacity and farmer income (MoA&FW 2021).
  • Prevent desertification that will limit access to RE: Over 16,980 square kilometres of land in Rajasthan, with the best RE potential of 832 GW, is desert. The expansion of deserts will be detrimental to the development of RE. Therefore, measures to halt the growth of desertification, such as the development of green walls or the remediation of wastelands adjoining deserts, should be considered.
  • Mechanism to address social impact: More than half of the total onshore wind and solar potential is located in districts that have experienced at least one social conflict related to some form of development project. We can expect these conflicts to increase with largerscale RE deployment. Therefore, a formal mechanism is needed to involve all stakeholders in project development to avoid conflicts.
  • Develop water management policies specifically for energy production: Currently, there is no category for water allocation for energy production; it is instead captured under the industries category. Therefore, water allocation for green hydrogen production needs to be prioritised through a revision of existing water policies at the central, state, and union territory level.
  • Assess the need for developing surface water storage: In districts where internal uncommitted surface water is available for transfer to green hydrogen plants, assessments are needed to determine whether water can be allocated from existing surface water storage facilities such as reservoirs. If not, additional storage facilities need to be created.

India has significant RE generation and green hydrogen production capacity to transition the country to net-zero and improve energy security. However, it will require careful longplanning and policy support to achieve this objective.

FAQs

Frequently Asked Questions

  • How can green hydrogen help India achieve its net zero targets?

    Green hydrogen is essential in sectors like fertiliser and chemical industries where it is already a feedstock. Additionally, it can directly help decarbonise sectors like steel and heavy-duty transportation. It is also an essential input for carbon capture and utilisation solutions where carbon dioxide is combined with hydrogen to make fuels and chemicals.

  • What are the two challenges to the renewable energy and green hydrogen nexus?

    Land related issues, either social conflicts, population density and land prices are all risks to large scale RE deployment. These challenges flow into green hydrogen development, with the additional demand for water management.

  • What are the two types of constraints facing large-scale renewable energy and green hydrogen development?

    There are two types of constraints that have been evaluated - exclusion and limiting constraints. Exclusion constraints refer to those constraints that prevent the deployment of renewable projects such as water bodies, reserve forests, military installations and built up areas. Constraints such as seismic zones, climate risks, land prices, population density and land-related conflicts are referred to as limiting constraints that do not prevent deployment of projects but can act as barriers if not addressed appropriately.

  • What are the three recommendations for policy makers and businesses on realising India's RE potential.

    Development of land banks graded by RE quality, grid access, water availability, etc., can help speed up project development. Innovative solutions such as agrovoltaics for reducing land requirements and green walls to prevent desertification will be necessary to realise our potential to the maximum. Finally, water availability is not an issue for green hydrogen production, but water management will be critical.

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