In a bid to develop India’s embryonic green hydrogen sector thereby supporting the country’s decarbonisation efforts, Indian Oil Corporation, Larsen & Toubro (L&T), and ReNew Power (“ReNew”) signed a binding term sheet for the formation of a Joint Venture (JV) business.
According to a communication from L&T, the tripartite venture aims to bring together the credentials of the company in designing, executing and delivering EPC projects, IndianOil’s 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.
Sumant Sinha, Chairman and CEO, ReNew Power, said that in alignment with the government’s broader strategic climate goals for 2030 and 2070 set by Prime Minister Narendra Modi, the company looks forward to working with L&T and IndianOil to build the green hydrogen business in India.
SN Subrahmanyan, CEO & MD, L&T, said, “We consider this partnership as a significant step in India’s quest for alternative energy.”
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.
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, however, the refineries will be the pivot around which India’s green hydrogen revolution will materialise in a substantial way, he added.
Today, hydrogen is mainly used in the refining, steel and fertiliser sectors, which will be the focus of the JVs’ initial efforts, the communication stated.
The country’s refining sector consumes approximately 2MMT of grey hydrogen every year, with IndianOil owning one of its largest shares of refining output.
While nearly all hydrogen produced in India today is grey, it is estimated that the demand for Hydrogen will be 12MMT by 2030, and around 40% of the element produced in the country (around 5MMT) 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 clean energy technologies such as solar PV and wind turbines.