Economic Survey 2023: Need to create strategic mineral reserves, states document

Green hydrogen cost may range between $1.7-$2.4/per kg by 2030.

The Economic Survey 2023 document tabled on January 31 highlighted the need for a multi-dimensional mineral policy and strategic minerals reserves, along the lines of strategic petroleum reserves. The document listed the skewed distribution of critical minerals as a supply risk.

While India has set a target to meet half of its energy requirements through green sources, the Economic Survey 2022-23 has highlighted essential minerals for a supply risk in the country’s green energy transition.

“While the demand for critical minerals is set to increase because of the global preference and emphasis towards renewable energy, the global supply chain of the critical minerals is highly concentrated and unevenly distributed. The skewed distribution of the resource poses a supply risk in the face of its enhanced demand,” the document noted, adding a carefully crafted multi-dimensional mineral policy would reduce our dependence and address the problems for the future.

The Survey report added the country has resources of strategic minerals such as nickel, cobalt, molybdenum, and heavy rare earth elements, which need further exploration to evaluate quantities of reserves.

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Green hydrogen cost may range between $1.7-$2.4/per kg by 2030.

The Economic Survey 2022-23 cited NITI Aayog’s June 2022 report to state that by 2030, the cost of green hydrogen may even fall below the price of grey hydrogen. The survey report mentions that the cost of green hydrogen may range between $1.7-$2.4/per kg by 2030, compared to grey hydrogen which is pegged at $1.8-$2.7 per kg.

On January 4, 2023, the government approved the National Green Hydrogen Mission with an initial outlay of Rs 19,744 crore, aiming to make India an energy-independent nation, and to de-carbonise critical sectors. Through the mission, the government hopes to mobilise over Rs 8 lakh crore of investment by 2030.

Citing NITI Aayog’s report, the survey stated that the cumulative value of the green hydrogen market in India will be US$ 8 billion by 2030 and US$ 340 billion by 2050. The electrolyser market will be approximately US$ 5 billion by 2030 and US$ 31 billion by 2050. In addition, the adoption of green hydrogen will also result in 3.6 giga tonnes of cumulative CO2 emission reduction by 2050.

“This will also generate enormous energy import savings, ensure stability in industry input prices, and strengthen foreign exchange reserves in the long run,” it stated.

The government also quoted a recent report by the International Renewable Energy Agency (2020) to state that the cost of electrolysers is crucial for making green hydrogen economically viable. “The report also underscores the importance of innovation in electrolyser technology and the rapid increase in its scale of production as the main factors that would drive down the cost of electrolysers and green hydrogen,” it stated.