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.
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.
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An interactive explainer to understand how multiple challenges could emerge simultaneously as India scales up its RE capacity
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.
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:
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.
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.
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.
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:
Figure ES1 Case 1 for scaling up RE projects in India
Figure ES2 Case 2 for scaling up RE projects 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:
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
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:
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.
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.
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.
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.
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.