“,”elements”:[]}],”thumb_big”:”https://etimg.etb2bimg.com/thumb/msid-117880170,imgsize-47772,width-1200,height=765,overlay-etauto/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms.jpg”,”thumb_small”:”https://etimg.etb2bimg.com/thumb/img-size-47772/117880170.cms?width=150&height=112″,”time”:”2025-02-03 12:27:07″,”is_live”:false,”prime_id”:0,”highlights”:[],”highlights_html”:””,”also_read_available”:false,”body”:”
“>
India’s green hydrogen sector is expected to be increasingly dominated by big players going forward as high capital requirements, economies of scale, and financial challenges will drive out small players, according to experts.
“It is indeed true that the initial excitement around the green hydrogen business in India stands reduced with the early enthusiasm from companies of all sizes entering the sector has diminished, leading to a landscape increasingly dominated by large firms,” said Ravi Shekhar, founder and managing director, Eninrac, a research consultancy.
One of the key reasons behind big firms dominating the sector includes their advantage on economies of scale.
“While it’s challenging to predict with certainty, there are a few trends and factors that suggest big players might have a significant role. Big players in the energy sector typically have the advantage of economies of scale, which can reduce production costs and make green hydrogen more competitive,” said Manoj Bansal, Partner, Grant Thornton Bharat.
He said that large companies often have the financial capability to invest in research and development, leading to technological advancements that can drive the growth of the GH2 sector.
“Such companies are more likely to form partnerships and collaborations with other companies, governments, and research institutions, which can accelerate the development and deployment of green hydrogen technologies,” he added.
Shankar said that large corporations often have better access to financing options, enabling them to undertake significant projects in the green hydrogen sector. For example, Adani New Industries has invested USD 50 billion in green hydrogen in collaboration with TotalEnergies to create the world’s largest green hydrogen ecosystem.
Reliance Industries and Adani Group have also announced significant investments in green hydrogen, leveraging their scale to achieve cost efficiencies. One such example is RIL, which has invested USD 10 billion to generate 100 GW of solar electricity from renewable sources to produce green hydrogen by 2025.
According to Shankar, India’s green hydrogen market is projected to be worth USD 8 billion by 2030 and USD 340 billion by 2050, which indicates substantial investments primarily from major players.
He added that the production of green hydrogen requires investments in advanced technologies such as electrolysers and these high capital expenditures pose challenges for small and medium-sized enterprises.
However, according to Sumit Chowdhury, CEO of production company Hydreen and trading exchange, GreenEarthX, the nature of usage of green hydrogen necessitates many smaller plants and based on local conditions and availability of renewable energy, there will be many opportunities for smaller players to design, develop, and run green hydrogen plants.
“Right now it may look like only the big players are able to get funding for their plants, but the advent of a digital marketplace will create a level playing field and make price discovery and logistics simple,” he said.
Chowdhury added that this is just the beginning of a very long journey and that it was in every country’s best interest to create a competitive marketplace and not let a few large players create cartels that fix prices.
According to Eninrac’s Shekhar, the criteria of net worth for players participating in RfS for SECI bids is another challenge for smaller players.
“The stringent financial requirements create significant barriers for MSMEs, as their investment in plant and machinery is capped at USD 6 million. This effectively excludes many manufacturing businesses and start-ups from entering the electrolyzer manufacturing sector,” he said.
The Request for Selection mandates a minimum net worth of about USD 120,000 per MW and a performance bank guarantee of USD 18,048 per MW. With a minimum bid capacity set at 100 MW under Bucket-1, bidders are required to demonstrate a net worth of USD 12 million and provide a performance bank guarantee of USD 1.8 million.
He further added that the substantial financial burden of the bank guarantee requirement poses another challenge for entities without established credit lines, making it even more difficult for them to participate in the bidding process.
“,”next_sibling”:[{“msid”:117879513,”title”:”Rupee slides down to record low of 87.29 after Trump’s tariff threats”,”entity_type”:”ARTICLE”,”link”:”/news/industry/rupee-slides-down-to-record-low-of-87-29-after-trumps-tariff-threats/117879513″,”link_next_mobile”:”/news/industry/rupee-slides-down-to-record-low-of-87-29-after-trumps-tariff-threats/117879513?next=1″,”category_name”:null,”category_name_seo”:”industry”}],”related_content”:[],”seoschemas”:false,”social_share”:{“fb”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=facebook&utm_medium={{DEVICE_TYPE}}”,”x”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=twitter&utm_medium={{DEVICE_TYPE}}”,”whatsapp”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=wapp&utm_medium={{DEVICE_TYPE}}”,”linkdin”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=linkedin&utm_medium={{DEVICE_TYPE}}”,”telegram”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=telegram&utm_medium={{DEVICE_TYPE}}”,”copy”:”/news/industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms/117880170?utm_source=copy&utm_medium={{DEVICE_TYPE}}”},”cat_msid”:25384693,”cat_sub_msid”:false,”msid”:117880170,”entity_type”:”ARTICLE”,”title”:”Indiau2019s green hydrogen sector may belong to big players; costs to squeeze-out small firms”,”synopsis”:”u201cWhile it’s challenging to predict with certainty, there are a few trends and factors that suggest big players might have a significant role. Big players in the energy sector typically have the advantage of economies of scale, which can reduce production costs and make green hydrogen more competitive,u201d said Manoj Bansal, Partner, Grant Thornton Bharat.”,”titleseo”:”industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms”,”status”:”ACTIVE”,”authors”:[{“author_name”:”Aarushi Koundal”,”author_link”:”/author/479253008/aarushi-koundal”,”author_api_link”:”/author/479253008″,”author_image”:”https://etimg.etb2bimg.com/authorthumb/479253008.cms?width=250&height=250&imgsize=19142″,”author_additional”:{“thumbsize”:true,”msid”:479253008,”author_name”:”Aarushi Koundal”,”author_seo_name”:”aarushi-koundal”,”designation”:”Senior Correspondent”,”agency”:false}}],”Alttitle”:{“minfo”:””},”artag”:”ETEnergyWorld”,”artdate”:”2025-02-03 12:27:07″,”lastupd”:”2025-02-03 12:30:13″,”breadcrumbTags”:[“India green hydrogen sector”,”green hydrogen investments”,”large players green hydrogen”,”small firms green hydrogen”,”economies of scale green hydrogen”,”green hydrogen market value”,”Reliance Industries green hydrogen”,”Adani green hydrogen”,”challenges small businesses green hydrogen”,”Eninrac”],”secinfo”:{“seolocation”:”industry/indias-green-hydrogen-sector-may-belong-to-big-players-costs-to-squeeze-out-small-firms”}}” data-authors=”[” aarushi data-author-list=”Aarushi Koundal” data-category-name=”Industry” data-category_id=”23″ data-cat_msid=”25384693″ data-date=”2025-02-03″ data-index=”article_1″ data-keywords=”India green hydrogen sector, green hydrogen investments, large players green hydrogen, small firms green hydrogen, economies of scale green hydrogen, green hydrogen market value, Reliance Industries green hydrogen, Adani green hydrogen, challenges small businesses green hydrogen, Eninrac” data-type=”news”>
“While it’s challenging to predict with certainty, there are a few trends and factors that suggest big players might have a significant role. Big players in the energy sector typically have the advantage of economies of scale, which can reduce production costs and make green hydrogen more competitive,” said Manoj Bansal, Partner, Grant Thornton Bharat.
“>
India’s green hydrogen sector is expected to be increasingly dominated by big players going forward as high capital requirements, economies of scale, and financial challenges will drive out small players, according to experts.
“It is indeed true that the initial excitement around the green hydrogen business in India stands reduced with the early enthusiasm from companies of all sizes entering the sector has diminished, leading to a landscape increasingly dominated by large firms,” said Ravi Shekhar, founder and managing director, Eninrac, a research consultancy.
One of the key reasons behind big firms dominating the sector includes their advantage on economies of scale.
“While it’s challenging to predict with certainty, there are a few trends and factors that suggest big players might have a significant role. Big players in the energy sector typically have the advantage of economies of scale, which can reduce production costs and make green hydrogen more competitive,” said Manoj Bansal, Partner, Grant Thornton Bharat.
He said that large companies often have the financial capability to invest in research and development, leading to technological advancements that can drive the growth of the GH2 sector.“Such companies are more likely to form partnerships and collaborations with other companies, governments, and research institutions, which can accelerate the development and deployment of green hydrogen technologies,” he added. Shankar said that large corporations often have better access to financing options, enabling them to undertake significant projects in the green hydrogen sector. For example, Adani New Industries has invested USD 50 billion in green hydrogen in collaboration with TotalEnergies to create the world’s largest green hydrogen ecosystem.
Reliance Industries and Adani Group have also announced significant investments in green hydrogen, leveraging their scale to achieve cost efficiencies. One such example is RIL, which has invested USD 10 billion to generate 100 GW of solar electricity from renewable sources to produce green hydrogen by 2025.
According to Shankar, India’s green hydrogen market is projected to be worth USD 8 billion by 2030 and USD 340 billion by 2050, which indicates substantial investments primarily from major players.
He added that the production of green hydrogen requires investments in advanced technologies such as electrolysers and these high capital expenditures pose challenges for small and medium-sized enterprises.
However, according to Sumit Chowdhury, CEO of production company Hydreen and trading exchange, GreenEarthX, the nature of usage of green hydrogen necessitates many smaller plants and based on local conditions and availability of renewable energy, there will be many opportunities for smaller players to design, develop, and run green hydrogen plants.
“Right now it may look like only the big players are able to get funding for their plants, but the advent of a digital marketplace will create a level playing field and make price discovery and logistics simple,” he said. Chowdhury added that this is just the beginning of a very long journey and that it was in every country’s best interest to create a competitive marketplace and not let a few large players create cartels that fix prices.
According to Eninrac’s Shekhar, the criteria of net worth for players participating in RfS for SECI bids is another challenge for smaller players.
“The stringent financial requirements create significant barriers for MSMEs, as their investment in plant and machinery is capped at USD 6 million. This effectively excludes many manufacturing businesses and start-ups from entering the electrolyzer manufacturing sector,” he said.
The Request for Selection mandates a minimum net worth of about USD 120,000 per MW and a performance bank guarantee of USD 18,048 per MW. With a minimum bid capacity set at 100 MW under Bucket-1, bidders are required to demonstrate a net worth of USD 12 million and provide a performance bank guarantee of USD 1.8 million.
He further added that the substantial financial burden of the bank guarantee requirement poses another challenge for entities without established credit lines, making it even more difficult for them to participate in the bidding process.