Overview

This working paper examines the prospects and challenges of building a green hydrogen economy in Rajasthan, against the backdrop of India's National Green Hydrogen Mission and the state's target of producing 2,000 kTPA of green hydrogen by 2030. Leveraging Rajasthan's combined solar and wind potential of 426 GW, the paper analyses the entire hydrogen value chain from production and storage to transportation and consumption, evaluating two demand scenarios and identifying key bottlenecks in production costs, infrastructure, and water availability.

The study proposes Green Hydrogen Valleys as an integrated solution to overcome value-chain fragmentation, and outlines financial and non-financial enablers needed to bridge the gap between current industrial readiness and policy ambition. It also recommends administrative recalibrations at the Rajasthan Renewable Energy Corporation Limited (RRECL) to coordinate the transition across sectors, positioning the state as a key player in India's emerging green hydrogen ecosystem.

Key Highlights

• A significant gap exists between realistic and aspirational demand. The Base Scenario projects about 180 kTPA demand by 2030, anchored in fertilizers and refineries, while the Policy Target Scenario projects 990 kTPA, requiring uptake in nascent sectors like steel, cement, and mobility.
  
  
• Achieving the targets will require approximately INR 3,20,000 Crore in investment and roughly 50 GW of dedicated renewable capacity, alongside electrolyser deployment at scale.
  
  
• Production costs hinge on two levers. Renewable energy contributes 50-70% and electrolysers 30-50% of total cost, requiring localised electrolyser manufacturing, open-access charge waivers, and continued RE cost reduction beyond RGHP's existing incentives.
  
  
• Water stress is a binding constraint. With 9 kg of water needed per kg of hydrogen and large parts of Rajasthan projected to face extremely high water stress by 2030, water-conservative production methods and innovative management approaches will be critical.
  
  
• Green Hydrogen Valleys offer an integrated pathway. Co-locating production, storage, transport, and consumption within regional clusters can reduce logistics costs, pool infrastructure, and enable stable offtake agreements, with Rajasthan's existing RE plants and gas-petroleum corridors providing a strong foundation.
  
  

RRECL needs to evolve into the nodal coordinating agency, supported by a Rajasthan Green Hydrogen Council and a Green Hydrogen Hub subsidiary, alongside enabling instruments like a Green Hydrogen Consumption Obligation, unified tendering, blending mandates, and an export-oriented policy framework.