Uttar Pradesh faces difficult pursuit of ambitious goal

The landlocked state ranks low for renewable power potential and lacks the export scope of coastal areas, write Akansha Victor and Stefan Krumpelmann

Uttar Pradesh's recently finalised green hydrogen strategy stands out as the most comprehensive published by any Indian state. The government hopes that generous subsidies can attract project developers, but the state's renewables potential and its geographical position are less favourable than those of many of its peers.

The administration plans to heavily subsidise capital costs for renewable hydrogen and ammonia projects, with the largest facilities potentially having more than 40pc of their capital expenses covered by the state. It will also offer favourable rates for land leases and seek to build a wider hydrogen ecosystem, such as through a centre of excellence for technology and support for start-ups.

According to the strategy, Uttar Pradesh wants to produce 1mn t/yr of renewable hydrogen by 2028 — one of the most ambitious targets set by any Indian state. Rajasthan's goal of reaching 2mn t/yr by 2030 is arguably even more ambitious, but Maharashtra's 2028 target of 500,000 t/yr is just half that of Uttar Pradesh's, while Gujarat is aiming for 1mn t/yr two years later, by 2030.

But while the capital cost subsidies and other support measures could draw in project developers, Uttar Pradesh — India's most populous state and the fourth largest by landmass — faces significant challenges.

Even in the sunniest locations, its potential for solar photovoltaic output is far behind that in many other regions of India — especially the deserts of Rajasthan and Gujarat — data from the World Bank's Global Solar Atlas show. And even in Uttar Pradesh's windiest places, the mean wind speed is only just over 5m/s, according to the Global Wind Atlas. Mean wind speeds in Rajasthan, Gujarat and Maharashtra are above 8m/s in some locations, while they reach more than 10m/s in India's windiest spots, such as on the southern tip of Tamil Nadu — another state that harbours ambitions to become a major producer of renewable hydrogen. And neither does Uttar Pradesh boast the same hydropower potential as the more mountainous states in northern India, such as Himachal Pradesh.

Somewhat unsurprisingly then, renewable power generation in Uttar Pradesh has lagged the penetration achieved elsewhere. Including off-grid deployment, the state had 5.6GW of renewable power generation capacity installed by the end of January, data from India's ministry of new and renewable energy show. This was less than a quarter of the capacity in Rajasthan and Gujarat, leaving Uttar Pradesh trailing in 10th place.

Reaching 1mn t/yr of renewable hydrogen output by 2028 could require about 10GW of electrolyser capacity to be fed by approximately 20GW of renewable power capacity. This means Uttar Pradesh might have to nearly quadruple its renewable capacity to meet its hydrogen production targets alone — leaving aside any necessary build-out for direct electrification.

Locale difficulty

Uttar Pradesh's geographical location presents another challenge. Being landlocked, it is a less attractive proposition for export-oriented project developers than states with long coastlines and port infrastructure. Many of the dozens of large renewable hydrogen or ammonia production projects announced across India are targeting exports, eyeing lucrative deliveries to key demand centres in Europe and northeast Asia. But projects in Uttar Pradesh might primarily depend on local demand, such as from the fertiliser and oil refining sectors, as anchor offtakers.

These challenges might explain why Uttar Pradesh, despite being the first state to release a draft green hydrogen policy in 2022, has not seen the same amount of interest as others. While some project plans exist in Uttar Pradesh, the state lags far behind others in terms of announced production capacity.

India states