Green Hydrogen BLUprint

January 2024
 Net-Zero Commitments take centerstage, propelling adoption of renewables

Projections of GHG Surge in Renewable Energy Demand

Emissions by Sector in 2050
GHG Emissions by
Sector in 2019 The International Renewable Energy Agency (IRENA)
estimates that the share of renewable energy in total
final energy consumption (TFEC) could double by
Transportation 2030, from 18% in 2010 to 36% in 2030.
Energy
Challenges of Renewable Energy
Agriculture
Transition
Nature

Industry Intermittency & Infra Issues: Renewable sources can

produce energy during off-peak demand hours,
creating an energy storage challenge coupled with
lack of infra available for the clean transition

Hydrogen's Role: Green Hydrogen will be a key element in delivering 90% of the required reductions,
with 75% achievable through renewable power and the electrification of heat and transport.

● The shift towards electrification powered by hydrogen in buildings, transportation, and industry will contribute to
reducing the energy intensity of GDP and, consequently, CO2 emissions.
● However, Non-energy-related CO2 emissions, including agriculture and deforestation, are expected to decline more slowly.
● Green Hydrogen will be a key element in delivering 90% of the required reductions, with 75% achievable through
renewable power and the electrification of heat and transport.

Source: McK 2050 Emissions Report, IRENA 2050 Roadmap

Hydrogen to play an instrumental role in reaching global mitigation targets

Common goal of reducing Major challenges exist to Hydrogen can be instrumental in

emissions to curb climate change reaching decarbonisation goals meeting these changes

1 Key advantages of hydrogen

66 countries 45% reduction The sectors emitting the most
GHG depend heavily on fossil fuels & are
globally have in Indian difficult to decarbonise
announced greenhouse gas
commitments to (GHG) emissions Energy Transportation Industry Net-zero emissions when produced
reach net-zero targeted by 2030 ~41% ~21% ~20% (if produced as green hydrogen using
emissions by 2050 renewable energy) and when used
% of contribution to total GHG emissions

The current energy mix remains

heavily dependent on fossil fuels
Indian primary energy demand by source 2 Highly Versatile with both direct
(2021) applications in transportation and industry,
Wide scale integration of renewable energy indirect applications in Power-to-X and for
~5% requires a viable energy carrier & storage grid stabilisation
renewables solution to bridge intermittent supply & demand

Supply Demand

Renewable energy Intra-day, weekly

exhibits short- and & seasonal variations High gravimetric energy density,
~95% long-term variation are sizable allowing easy and efficient storage
fossil fuels and transportation of energy over
time and distance
Decoding CO2 Emissions Reductions through targeting End-Use Sectors that offer early
adoption of Green Hydrogen (1/2)
Energy CO2 Equation Transport CO2 Equation

Subsector Current GtCO₂e Subsector Current GtCO₂e

Road Transport 6.0

Power (Electricity & Heat
14.0
Producers)
- Passenger 3.6

- Coal 10.1
- Buses & Minibuses 0.1

- Oil 0.6
- Two/Three Wheelers 0.1

- Natural Gas 3.1

- Freight (Heavy & Medium Trucks) 2.4

- Other 0.2
Aviation 0.9

Other Energy Industries 1.6

- Passenger 0.7

Buildings (Residential + - Freight 0.2

2.9
Commercial & Public Service)

Maritime 0.9
Other & Fugitive Emissions 5.9
Rail 0.1

Other (Pipe, etc.) 0.4

Green Hydrogen being most effective in decarbonizing these hard-to-abate themes
Decoding CO2 Emissions Reductions through targeting End-Use Sectors that offer early
adoption of Green Hydrogen (2/2)

Agriculture CO2 Equation Industry CO2 Equation

Subsector Current GtCO₂e Subsector Current GtCO₂e

Agricultural Production 6.9 Iron & Steel 3.8

- Ruminant Enteric Cement 3.0

2.3
Fermentation
Other Materials 5.0

- Energy on-Farm 1.1

- Chemicals (Plastics &
1.4
- Rice (Methane) 0.9 Rubber)

- Soil Fertilization 0.6 - Other Minerals 1.1

- Manure Management 1.5 - Glass & Wood Products 1.3

- Ruminant Waste on Pastures 0.5 - Other Metals 1.2

Energy (Ag Energy Sources) 0.4

Waste 1.6
 Hydrogen carries the right to win with its versatility as an energy
carrier and wide breadth of end use-cases

Natural Gas: 49 Mt Refining: 38 Mt H 2

H 2; 196 Mtoe

Coal: 19 Mt H2 ; 2 Ammonia: 31 Mt H 2
Mtoe
Transport: <0.01 Mt H2
Oil: 0.5 Mt H2; 2 Mtoe
Other: 4 Mt H 2
Electricity/other:
0.5 Mt H2; 2 Mtoe Methanol: 12 Mt H 2
DRI: 4 Mt H 2
By-product
Hydrogen: 48 Mt H2
Other eg Heat:
26 Mt H 2
Losses: 2 Mt H 2

Production Consumption
Hydrogen as a versatile energy carrier can be produced Hydrogen is an energy carrier and can be used for
from a variety of feed-stocks, including natural gas, coal, a wide array of energy and industrial applications
biomass, waste, solar sources, wind, or nuclear sources like Power Generation, Steel Making, etc.

* all figures in Mt H2
Source: IEA
 The Hydrogen Shade Card - Based on the sources and processes of
Hydrogen production, it can be classified into various colors

Source: Blume’s Market Analysis & Multiple Reports

Future of Hydrogen - Green

Basics Why now for Green H2?

Green hydrogen, often referred to as "green H2,"

is hydrogen produced through a process called
electrolysis using renewable energy sources such
as wind, solar, or hydropower. The electricity
required for this process is generated from
renewable sources, which makes the overall
production of hydrogen environmentally
friendly and carbon-neutral.

Plummeting cost of renewable

electricity and Zero emissions in
production and end use make
hydrogen a pivotal resource to drive
the world energy transition

Source: IRENA Insights webinar series

Mapping Green Hydrogen's Journey: From Production to Powering the Future

Direct Applications in transportation

Renewable Energy Hydrogen and as feedstock in the industry
Production Production Methods

Steam Methane
Reforming Buses & Smaller Industry Steel
Refineries
Trucks Ships Feedstock Production

Power-to-X: Indirect use as the basis for

production of green fuels/e-fuels
Coal Gasification

Transport, Fertiliser Replace

Conversion via Aviation and (e-ammonia) Natural Gas
synthesis Shipping

Electrolysis

Grid stabilisation through storage of hydrogen

H2 and re-conversion to energy through fuel cell
technology

Biological Storage and

transportation of
hydrogen Conversion Electric Grid
via fuel cells
Hydrogen Adoption Matrix- Mid to Long term

High H2 Adoption
Fertilizers Methanol Desulphurization Hydrocracking
Hydrogen being
highly competitive in
the long term
Chemical Long term
Steel Shipping
feedstock storage

Long haul Coastal and

Remote Trains
Aviation river vessels

Medium haul Long distance

Generators
Aviation trucks & coaches

Short haul Commercial Clean power Uninterruptible

Aviation Heating imports Power Supply (UPS)

Domestic Low Temperature

Light Aviation Regional Trucks Rural trains
Heating Industrial Heating
Long H2 Adoption
Hydrogen being
highly uncompetitive Metro trains Buses H2FC Cars Urban Delivery
for these use-cases

Potential Targets for the next 3-5 years

Hydrogen Production Methods - Overview

Methods of Hydrogen
High

Coal Production
Solid Oxide Gasification
Electrolyser
SMR
Alkaline Thermochemical
Electrolyser
Degree of Carbon Emissions

Alkaline Electrolysis
Exchange
PEM
Membrane Electrolyser

Biomass- Direct Solar

derived Water Splitting
liquid
Biomass
reforming
Gasification Biological

Photobiological
Size of the Bubble
represents $/per kg cost
Photo-
electrochemical of Hydrogen Production

?
Thermochemical
Low

Water-splitting

Low High
Degree of Commercialization
Estimated Price Range of existing Production Processes
Hydrogen Storage- A bumpy road with no shortcuts

Why is Storage an Issue for Hydrogen?

● Low Energy Density: Hydrogen, in its gaseous form, has a lower energy density by volume compared to
conventional fuels, making storage for substantial energy needs challenging.

● High Pressurization Requirements: To store hydrogen compactly, it often needs to be compressed to very high
pressures(350-700 bar or 5,000-10,000 psi) , which can be energy-intensive and poses safety risks.

● Cryogenic Challenges: Liquid hydrogen storage requires cryogenic temperatures(-252 C), adding complexity and
energy overhead to the storage process.

● Material challenges: Some materials become brittle (“hydrogen embrittlement”) after exposure to hydrogen

Impact on End Use-Cases:

● Mobility Applications: For hydrogen to be a viable fuel for vehicles, efficient storage solutions that don't take up
excessive space or add considerable weight are essential.

● Grid Storage & Energy Reserves: To leverage hydrogen for grid energy storage or as backup reserves, scalable
and safe storage solutions are crucial.

● Industrial Uses: Industries require a consistent hydrogen supply. Efficient storage can dictate the feasibility of
hydrogen as a primary resource in various industrial processes.
How is the Green Hydrogen economy shaping up for India?

Forecasts

● The cumulative value of the green hydrogen market in India could be $8 bn by 2030 and $340 billion by 2050
($31bn coming from just the electrolyser stack)
● Bigger conglomerates like Reliance and Adani are expected to end up owning 60-70% of the green value chain.
~$80-100bn+ investments announced in this space by veterans like Adani, Ambani and Tata in the upcoming
decade
● Electrolysers seem to be the fastest-growing production tech, which also invites huge capex commitments.
We believe much of the electrolyser stack in the country would again be owned by the veterans
○ India has 6 alkaline electrolyser manufacturers and a few PSUs manufacturing BoP components, but
domestic production of electrochemical stacks remains muted- India will need ~50 GW of electrolyser
capacity (installed) to achieve 5 mn tons of production target for green hydrogen by 2030
● Capital allocation by the rest of the market would only happen when cost parity is achieved

Why is it tough for startups to win in this ecosystem

● Very high entry barriers - 1 mn ton of H2 = ~20bn in capex

● Geopolitical, energy security, and macro-level issues likely to create much disturbance in the market
● Likely no opportunities for independent developers at scale
What does winning look like for the electrolyser market?

Grounds of innovation in Optimising electrolyser design and manufacturing based on trade-

electrolyser tech- offs and applications seems to be the winning strategy for now.
Membrane thickness, Gas
Permeation, Catalyst
Layers, Critical Materials,
Current Densities

Increasing
manufacturing capacity
and module size-
benefits the stack cost
and cost of BoP

Reducing
(Critical) Material Use –
Reducing materials use,
increasing yield and
recycling solve for cost,
supply chains and lifetime
Achieving large cost reductions via innovation and scaling up manufacturing seem
to be the strategy for solving for the Electrolyser whitespace*
*Source: IRENA Insights webinar series
Biohydrogen production- Biggest ground for Start-up Innovation

The possibility of using industrial wastewater as raw material coupled with low energy and infra requirements holds
immense potential in India. A lot needs to be figured out in terms of effective sourcing of waste biomass, enzymes involved,
pre-treatment methods, use of integrated and hybrid systems etc for Biological Hydrogen to take off in India

Enhancing understanding Optimization of Post

of microbial ecosystems fermentation downstream
and genetic manipulation steps (purification of hydrogen
of enzymes from the produced gas)

The application of metabolic

Biological or genetic engineering
Advances in feedstock
utilization Hydrogen (e.g., the modification of
Production hydrogenase)

Figuring out new Making pretreatment

engineering designs for the methods cheaper
modification of reactors and more effective
Utilization of Waste +
production of clean energy
The Start-up Innovation Response for the glaring gaps in India's
Hydrogen Fuel Cell Economy

At present, lithium batteries & fuel cells are the main technical approaches to replacing fossil fuel in vehicles. Presently, lithium
battery-based vehicles are cheaper than FCVs. However, where long driving range, short refuelling time and high sustained power
output are required, like for many heavy-duty vehicles, HFCs, are likely to offer important advantages & development opportunities.

DEVELOPMENT ENGINEERING INPUT & INFRA

● Manufacturing costs dominate the ● On site hydrogen generation units

total cost of PEM fuel cells, whereas the (reformers) operating on commercial
share of materials cost is much lower. fuels such as LPG, methanol etc are
● An increased scale in production can not available in the country
bring the manufacturing costs down ● An infrastructure for the mass-market
by as much as ~50% availability of hydrogen, or methanol
fuel initially is needed

RESEARCH
INDIA NEEDS TO FOCUS ON
● Alternatives to imported hydrogen
● Novel materials, catalysts for durable
cell materials, developing high-
and low-cost PEM Fuel Cells.
pressure hydrogen storage tech,
● Compressed Hydrogen FC integrated
cylinder manufacturing tech and
system suitable for even LDVs.
reducing efficiency losses due to
● Fwd and backward integration of
multiple conversions seem to be the
mass produced less expensive FCs
top innovation grounds
● Develop strong IP (Patents) for Fuel
Cell Technology
The current landscape of the Indian startup ecosystem is confined to
just two spectrums

In the context of hydrogen production technologies and fuel cells, Indian startups have carved a niche for
themselves. However, the innovation playground seems vast, with limited ventures exploring the
uncharted territories of distribution, storage, and technology platformization

ELECTROLYZERS BIOMASS FUEL CELLS

Production

Utilization
H2

ELECTROLYZER COMPONENTS BIOLOGICAL

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Thank you!
For questions or feedback please contact:

Sonisha | sonisha@blume.vc
Mudit | mudit@blume.vc