India's ability to produce competitively priced green hydrogen depends on reducing project risks, scaling up electrolyser manufacturing and ensuring reliable access to affordable renewable electricity.
Contracts Can Reduce Risk
Speaking at Horizons Clean Energy Expansion India 2026, R.K. Malhotra, President, Hydrogen Association of India, said developers will offer more competitive prices once project risks are reduced. “The three key things are de-risking, assured offtake and assured payment,” he said.
The cost of renewable electricity is a central factor in hydrogen production, while the availability of power throughout the day also affects electrolyser utilisation. The industry is therefore examining hybrid wind and solar systems, renewable energy banking, storage and alternative sources of low-carbon electricity to improve project economics.
Malhotra said assured and timely payments are critical to building confidence among hydrogen producers. He noted that payment certainty could influence the prices offered by developers, particularly as projects require significant upfront investment. “Payment is assured but not in time. So payment has to be assured and on time,” he added.
Malhotra also pointed to demand aggregation as a way to create scale and support lower prices during the procurement process. Aligning contract periods more closely with renewable energy project lifespans could help lower prices. “The RE projects, which constitute approximately 70% of the total project cost of green ammonia production, have a life of 25 years and our contracts are for 10 years only,” he said.
Manufacturing Moves To Scale
The electrolyser industry is shifting from pilot projects towards industrial-scale deployment, with manufacturers focusing on standardisation, supply chain maturity and shorter execution timelines. Vijay Shekhawat, Vice-President and Head, Public Affairs, Thyssenkrupp Nucera India, said, “We have actually moved beyond the proof of concept stage and entered into something which is a very initial stage of large scale, a steep curve of learning on how we can actually deliver some of the industrial-scale projects specifically for the electrolyser capacities.”
The next phase of cost reduction would depend on transferring lessons from individual projects into standardised execution practices across markets. “It’s very, very important to see how you are actually getting those experiences from the actual ground implementation, putting those into the standardization practices,” Shekhawat said. He also pointed to the need to shorten execution timelines and strengthen supply chains. Safety requirements were creating additional areas of technological learning, including the use of artificial intelligence in project safety systems.
Utilisation Drives Economics
Sanjay Sharma, Director, Solar Energy Corporation of India (SECI), said manufacturing at scale would be critical to reducing electrolyser costs as the industry develops standardised and modular products. He noted that standardisation and modularisation would be important as electrolyser manufacturing moves towards industrial-scale deployment. “Manufacturing at scale is very, very critical because that definitely will bring down the cost,” he said.
However, the cost of an electrolyser cannot be assessed only through its purchase price. The number of hours for which the equipment operates annually would also affect the economics of hydrogen production. Higher utilisation could therefore become an important consideration for developers when designing projects and assessing the overall cost of hydrogen and its derivatives. Improving the availability of renewable electricity will be central to ensuring that electrolysers operate for longer periods.
Power Banking And Project Design
Prem Bharti, Deputy General Manager, Renewable Energy and Green Hydrogen, Oriana, said the green hydrogen industry had moved from pilot projects towards larger-scale development, but still had more to learn as India prepares to deploy commercial-scale facilities. “We have come from pilot to scale level of the development of the green hydrogen and the derivatives which we are talking about today,” Bharti noted. “So still more to learn and to understand because the actual deployment of the large-scale plant has not been realised in India yet.”
Bharti said infrastructure readiness would be critical to meeting project execution timelines and demonstrating India’s ability to deliver large-scale renewable energy and green hydrogen projects. He pointed to the challenges involved in deploying projects while the industry continues to develop its technology, supply chains and execution capabilities.
Offtake Needs Infrastructure
Malhotra said lessons from the renewable energy sector had been incorporated into the green ammonia procurement process through bankable contracts, assured offtake and payment security. However, hydrogen and its derivatives involve additional logistical requirements because they cannot simply be injected into an interconnected electricity grid and withdrawn elsewhere.
Hydrogen and its derivatives must be produced, stored and transported before reaching the final buyer. This makes coordination between production facilities, storage, transport infrastructure and end-user demand more important. Malhotra said the industry had adopted several lessons from renewable energy procurement, but the physical characteristics of hydrogen created additional challenges.
The green hydrogen cost curve is shaped by more than electrolyser prices alone. Contract structures, payment reliability, demand aggregation, manufacturing scale, renewable power utilisation and infrastructure coordination will determine how quickly India’s green hydrogen projects can move from initial deployment to commercially viable scale.