New Delhi, Apr 4 (PTI) Indian Oil Corporation (IOC), the nation’s top oil firm, will partner Larsen & Toubro and Goldman Sachs-backed renewable energy producer ReNew Power to produce green hydrogen as it follows the footsteps of groups headed by billionaires Mukesh Ambani and Gautam Adani to produce carbon-free fuel.
The three firms have signed a binding term sheet to jointly develop green hydrogen projects, while the state-run refiner and the engineering major will form a separate partnership for making electrolyzers for green hydrogen, according to a joint statement.
India, the world’s third-biggest emitter of carbon dioxide, is targeting annual production of 5 million tonnes of green hydrogen by splitting water using electricity produced from renewable sources such as solar or wind power. Demand for hydrogen is estimated to be 12 million tonnes in 2030.
This green hydrogen will replace the grey hydrogen, produced using fossil fuels, that is used in industrial processes at oil refineries, fertilizer plants and steel units.
IOC-L&T-ReNew will focus on green hydrogen projects at IOC’s Mathura and Panipat refineries in northern India, the statement said.
It did not elaborate but it is most likely that ReNew will supply the renewable power that will be used to split the water at an electrolyzer built by L&T and IOC.
Green hydrogen is considered the cleanest form of fuel and is a potential path to decarbonizing heavy industries.
Both Ambani and Adani have announced multi-billion-dollar plants for green hydrogen and the accompanying ecosystem.
Refineries in India consume about two million tonnes of hydrogen annually, much of it by the IOC group, which holds a third of the nation’s oil processing capacity.
The company is already working toward producing 70,000 tonnes a year of green hydrogen by 2030. Refineries typically use hydrogen for the removal of sulphur from fuels like diesel.
“The tripartite venture is a synergistic alliance that brings together the strong credentials of L&T in designing, executing, and delivering EPC projects, IOC’s established expertise in petroleum refining along with its presence across the energy spectrum, and the expertise of ReNew in offering and developing utility-scale renewable energy solutions,” the statement said.
By 2050, nearly 80 per cent of India’s hydrogen is projected to be ‘green’ — produced by renewable electricity and electrolysis.
“Today, hydrogen is mainly used in the refining, steel and fertilizer sectors, which will be the focus of the JVs’ initial efforts,” the statement said, adding “the country’s refining sector consumes approx. 2 million tonnes of grey hydrogen every year, with IOC owning one of the largest shares of its refining output.” To help decarbonize the Indian industry, the new green hydrogen policy provides for 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.
Speaking about the joint venture, S N Subrahmanyan, CEO and MD, L&T, said “the IOC-L&T-ReNew JV will focus on developing green hydrogen projects in a time-bound manner to supply green hydrogen at an industrial scale.” While L&T will bring its strong EPC credentials to the table, IOC being India’s premier oil refiner with extensive capabilities in chemical processes and refining has established deep R&D capabilities in many aspects of the green hydrogen value chain, and ReNew Power has in a short time established itself as a leading renewable energy supplier and built itself a very strong reputation.
“We consider this partnership as a significant step in India’s quest for alternative energy,” he said. “Addressing another gap in the Green Hydrogen manufacturing chain, IOC-L&T JV will focus on production and sale of Electrolyzer.” Shrikant Madhav Vaidya, Chairman, IOC said “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 materialise in a substantial way, he said. “The partnership forged today will thus catalyse the greening of India’s energy basket.” Sumant Sinha, Chairman and CEO of ReNew Power, said, “In alignment with the government’s broader strategic climate goals for 2030 and 2070 set by Prime Minister Narendra Modi, ReNew looks forward to working with L&T and IOC to build the green hydrogen business in India. 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 the government of India’s recently announced green hydrogen policy to boost India Inc’s decarbonization journey,” he added.
ReNew Power and L&T had in December announced a joint venture to develop and operate green hydrogen projects in India.
India plans as much as 15 gigawatts of electrolyzer-making capacity and is considering production-linked incentives to encourage local manufacturing to produce some of the world’s cheapest green hydrogen. PTI ANZ ANZ ABM ABM
