Indian Oil Corporation Ltd (IndianOil), Larsen & Toubro (L&T) and ReNew Power have agreed to form a joint venture to develop the nascent green hydrogen sector in India.
The tripartite venture is a synergistic alliance that brings together the strong credentials of L&T in designing, executing, and delivering EPC projects, IndianOil’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.
Additionally, IndianOil and L&T have signed a binding term sheet to form a JV with equity participation to manufacture and sell electrolysers used in the production of green hydrogen.
Speaking about the joint venture, SN Subrahmanyan, CEO & MD, L&T, said, “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. 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 green hydrogen value chain, and ReNew Power has in a short time established itself as a leading renewable energy supplier and has built itself a very strong reputation. We consider this partnership as a significant step in India’s quest for alternative energy.”
On the JV, Shrikant Madhav Vaidya, Chairman, IndianOil, 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, however, will be the pivot around which India’s green hydrogen revolution will materialise in a substantial way.”
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 honourable Prime Minister Narendra Modi, ReNew looks forward to working with L&T and IndianOil 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 planned JVs aim to enable India’s transition from a grey hydrogen economy to a greener economy that increasingly manufactures hydrogen via electrolysis powered by renewable energy.
The Centre 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 the element.
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.
While nearly all hydrogen produced in India today is grey, it is estimated that demand for Hydrogen will be 12 MMT by 2030 and around 40 per cent of the element produced in the country (around 5 MMT) will be green, as per the guidelines in the Draft National Hydrogen Mission.
By 2050, nearly 80 per cent 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.
Today, hydrogen is mainly used in the refining, steel and fertiliser sectors, which will be the focus of the JV’s initial efforts. The country’s refining sector consumes approximately 2 MMT of grey hydrogen every year, with IndianOil owning one of the largest shares of its refining output.