Harnessing the power of Green Hydrogen: Neev Funds’ partnership with Hygenco

Hydrogen is progressively becoming a crucial energy carrier for the growing need for decarbonisation in hard-to-abate sectors. Industries such as iron and steel, fertilisers, refining, methanol, maritime shipping, aviation, trucking and more, fall under this category and account for close to 30% of global emissions.

Green Hydrogen is hydrogen generated through the electrolysis of water that uses electricity produced from renewable sources. Unlike Grey Hydrogen which stems from steam reforming of natural gas, Green Hydrogen can help reduce 3.6 gigatons of cumulative CO2 emissions by 2050 if employed across the board. Led by sectors in need of deep decarbonisation, the growing global momentum towards Hydrogen could mean that demand in India is set to quadruple by 2050, accounting for nearly 10% of global hydrogen demand; on a price parity basis alone, green hydrogen's share of this demand could increase from 16% in 2030 to nearly 94% by 2050. India’s economic growth will heavily rely on abundant and cheap energy availability. Out of 7,000 TWh of energy consumption of the nation, 85% of the power generated comes from fossil fuels (coal, oil and gas), nuclear makes up 2.5%, hydropower 4.5%, solar and wind form about 4%.

Signalling India’s intent to become the global hub for Green Hydrogen, Hon’ble PM Narendra Modi during his Independence Day speech in 2021 outlined, “not only will green hydrogen be the basis of green growth through green jobs, but it will also set an example for the world towards clean energy transition.”

?Hydrogen is called to be the emerging sunrise technology to achieve Net Zero ambitions. The fundamental chemical composition, multiple-end users, low-to-no GHG emissions upon combustion, harmony with other fuels, and property of being an energy carrier makes Hydrogen the strongest aspirant in the clean energy transition space, as opposed to incumbent energies.

The National Green Hydrogen Mission:

Launched in 2015, to substantially reduce carbon emissions and improve renewable energy sources, the National Green Hydrogen Mission seeks to promote the development of production capacity of Green Hydrogen of at least 5 MMT (million metric tonnes) per annum with associated sustainable energy capacity addition of almost 125 GW (gigawatts) in India by 2030. As per India’s Nationally Determined Contribution (NDC) to meet the goals of the Paris Agreement, the nation has committed to reduce emissions intensity of its GDP by 45% by 2030, compared to 2005 levels, and Green Hydrogen is strategically positioned to help fuel these ambitions. The Union Cabinet recently approved INR 19,744 crore aimed to make India a ‘global hub’ for using, producing and exporting Green Hydrogen.

Neev and Hygenco’s partnership:

Neev II, with a strong foundation of learning and experience from the preceding Fund, focusses on offering growth and capital extension to SMEs that offer climate solutions in clean energy, EVs, water and circular economy space. Fulfilling India’s NDCs, the SME sector remains front and centre, aligned with on-ground realities, to meet the nation’s climate change objectives. The Fund bridges the private equity gap necessary for climate resilience and decarbonisation in the SME space.

Last year, Neev II announced its investment in Haryana-based green hydrogen firm, Hygenco, to spread its expertise and benefits throughout the Climate Solutions providing SME ecosystem.

Founded in 2020, with the idea to address climate change issues, Hygenco was one of the first players to enter production and deployment of Green Hydrogen and Green Ammonia powered industry solutions. The firm develops and deploys green hydrogen plants for industrial clients and supplies the same through long-term purchase contracts. Aligned with their vision to work towards a green future, the firm has already set up a plant in Ujjain, Madhya Pradesh that aims to work towards India’s mission to produce 5 million tonnes of Green Hydrogen annually by 2030. To further decarbonisation goals, Hygenco has also signed India’s first commercial long-term hydrogen project with Jindal Stainless Limited, to reduce carbon emissions.

With the impetus of government initiatives supporting the envisioned green future for the planet, India is at the cusp of redefining sustainable development and renewable energy deployment, thereby emerging as a global hub. Neev Funds’ aim to strengthen innovative SMEs working towards Climate Solutions is further fortified by the investment in Hygenco. Through this partnership, Neev Funds is keen on accelerating the much-needed paradigm shift in the space of alternative energy options. As the world steers itself in a direction of Net Zero, Neev Funds is excited to be a part of this historical journey alongside Hygenco.