Tamil Nadu is leading the way in green investments, with its recent launch of an electric vehicle policy and the upcoming unveiling of its green hydrogen policy. While other states such as Gujarat, Himachal Pradesh, Uttar Pradesh, and Rajasthan are also drafting or launching green hydrogen policies, Tamil Nadu has already approved three major projects by ACME, Petronas, and Greenko and has received expressions of interest from 7-8 other companies. The state is attracting significant investments, with over ₹86,000 crore drawn in line with becoming carbon neutral by 2050.
Green hydrogen is produced through the electrolysis of water with electricity generated from renewable sources such as solar and wind, making it a low-carbon emission option. India has set a target of 5 million tonnes of green hydrogen by 2030, with ₹8 lakh crore in total investments. Tamil Nadu is one of ten states identified by the Union government as a potential hub.
Tamil Nadu’s natural advantages, including some of the best wind power, make green hydrogen an attractive prospect for the state. A combination of solar and wind energy can achieve 70%-80% utilization of an electrolyser plant. Additionally, the state is located on the east coast, a key global shipping route, which could help make it a hub for the export of green hydrogen.
Despite huge investments, most of the green-lit projects will be export-oriented and labor-light. The generation cost of green hydrogen is six to seven times the cost of coal and 2-3 times the cost of natural gas, making it expensive to produce. The early projects will likely be a hard couple of captive renewable power with green hydrogen projects. Existing renewable energy sources may not be critical to attract investments.
There will be challenges for Tamil Nadu, including the need for grid upgradation and competition from other states such as Rajasthan and Gujarat. However, with its combination of projects and policies, the state is attracting significant investments, making it an inflection point for green hydrogen in Tamil Nadu. This could help make Tamil Nadu a hub for the export of green hydrogen, says Ar Rm Arun, president, Southern India Chamber of Commerce & Industry.
