IndianOil, L&T and ReNew to drive India’s green hydrogen economy
In a bid to enable India’s decarbonisation, IndianOil, L&T and ReNew Power have announced a joint venture (JV) to develop the country’s green hydrogen sector.
Refiner and fuel retailer Indian Oil, Larsen & Toubro (L&T), an engineering and construction conglomerate, and ReNew Power, a renewable energy company, signed a binding term sheet to form the joint venture.
The tripartite venture aims to develop the nascent green hydrogen sector in India.
It will leverage L&T’s credentials in engineering, procurement and construction (EPC) projects, IndianOil’s acumen in petroleum refining and ReNew’s capability in utility-scale renewable energy solutions.
Speaking about the joint venture, S. N. Subrahmanyan, L&T CEO and managing director, commented in a statement, “India plans to rapidly march ahead in its decarbonisation efforts and production of green hydrogen is key in this endeavour. The IndianOil-L&T-ReNew JV will focus on developing green hydrogen projects in a time-bound manner to supply Green Hydrogen at an industrial scale.
“Addressing another gap in the green hydrogen manufacturing chain, IndianOil-L&T JV will focus on production and sale of electrolyser (…) Both these JVs aim to enable the nation’s ‘Aatmanirbhar Bharat’ mission to rapidly build, expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and a chemical feedstock for many sectors.”
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Green production
IndianOil and L&T have also signed a binding term sheet to form a JV with equity participation to manufacture and sell electrolysers used in green hydrogen production.
The planned JVs aim to enable India’s transition from a grey hydrogen economy to a greener economy. In this way, it hopes to spur increased hydrogen production via electrolysis powered by renewable energy.
Shrikant Madhav Vaidya, Chairman, IndianOil, added, “We are committed to powering India’s drive towards carbon neutrality by leveraging the power of green hydrogen. IndianOil is forging this alliance to realise India’s green hydrogen aspirations, which is in sync with the [Honourable] Prime Minister’s vision of making India a green hydrogen generation and export hub.
“To start with, this partnership will focus on green hydrogen projects at our Mathura and Panipat refineries. Alongside, other green hydrogen projects in India will also be evaluated. While the usage of hydrogen in the mobility sector will take its due time (…) the refineries will be the pivot around which India’s green hydrogen revolution will materialize in a substantial way.”
India’s hydrogen policy
In February, the central government announced the aims of the green hydrogen policy. This entails bolstering green hydrogen and green ammonia production to help India become a global hub for the green economy.
Mr. Sumant Sinha, Chairman and CEO of ReNew Power commented on how the new partnerships align with the government’s 2030 and 2070 climate goals. “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.”
For countries like India, with its ever-increasing oil and gas import bill, green hydrogen can also help provide crucial energy security by reducing the overall dependence on imported fossil fuels.
The road ahead
While nearly all hydrogen produced in India today is grey, it is estimated that demand for hydrogen will be 12MMT by 2030. Approximately 40% of the element produced in the country (around 5MMT) will be green, as per the draft national hydrogen mission guidelines.
Forecasts show that by 2050, nearly 80% of India’s hydrogen will be produced by renewable electricity and electrolysis. Green hydrogen may become the most competitive route for hydrogen production by 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 India’s industry, the new green hydrogen policy provides for the waiver of inter-state transmission charges for a period of 25 years. It also waives a banking provision of up to 30 days, which will help reduce the cost of green hydrogen significantly.
This will hopefully 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.
