Indian Oil Corporation (IOC), Larsen & Toubro (L&T) and ReNew Power (ReNew) on Monday said they have entered into binding agreement to form a joint venture company for green hydrogen business.
Additionally, IOC and L&T agreed to form a joint venture for manufacturing of electrolysers used in production of hydrogen through electrolysis of water.
The two JVs will help India expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and be used as chemical feedstock for many other sectors.
At present, hydrogen is mainly used in the refining, steel and fertiliser sectors, which will be the focus of the joint venture’s initial efforts. The country’s refining sector consumes around 2 million metric tonne of grey hydrogen every year. Going ahead, the planned joint venture will enable India’s transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy, the companies said.
SN Subrahmanyan, CEO & MD of L&T, said the JV will focus on developing green hydrogen projects in a time-bound manner at an industrial scale where L&T will use its strong EPC credentials — designing, executing, and delivering EPC projects. The venture will use Indian Oil’s Panipat and Mathura refinery for the green hydrogen projects and will also evaluate other hydrogen projects in India.
Shrikant Madhav Vaidya, chairman of IOC, said usage of hydrogen in the mobility sector will take its due time, however, refineries will be the pivot around which India’s green hydrogen revolution will materialise in a substantial way. “IOC is forging this alliance to realise India’s green hydrogen aspirations, and making India a green hydrogen generation and export hub,” Vaidya said.
Green hydrogen, unlike grey or black hydrogen, is produced using renewable power — wind and solar. That is where the role of ReNew Power becomes critical in the partnership.
Sumant Sinha, chairman and CEO of ReNew Power, said ReNew, as a leader in intelligent energy solutions and with advanced capability across renewable energy technologies, is well poised to complement the capabilities of our partners. The timing for these proposed JVs is excellent as they will help support Government of India’s recently announced green hydrogen policy to boost India Inc’s decarbonisation journey,Sinha said.
The central government in February notified the green hydrogen policy aimed at boosting production of green hydrogen and green ammonia to help the nation become a global hub for the environmentally friendly version of hydrogen
India, with its ever-increasing oil and gas import bill can look at green hydrogen as a crucial energy security by reducing the overall dependence on imported fossil fuels.
It is estimated that demand for hydrogen will be 12 million metric tonne by 2030 and around 40% of the element produced in the country (around 5 MMT) will be green, as per the draft National Hydrogen Mission guidelines.
By 2050, nearly 80% of India’s hydrogen is projected to be green, produced by renewable electricity and electrolysis. Green hydrogen may become the most competitive route for hydrogen production by around 2030. This may be driven by potential cost declines in key production technologies and in clean energy technologies such as solar PV and wind turbines.
To help decarbonise Indian industry, the new green hydrogen policy provides for the waiver of inter-state transmission charges for a period of 25 years and a banking provision of up to 30 days, which will help reduce the cost of green hydrogen significantly. This will, therefore, push the replacement of grey hydrogen with green. The ministry of power has also provided a single -window-clearance portal for all clearances and open access on priority to green hydrogen projects.
