India’s top oil firm Indian Oil Corporation (IOC), engineering and construction giant Larsen & Toubro and renewable energy company ReNew Power came together to form a joint venture to develop green hydrogen business. IOC and L&T have additionally signed a pact to form a joint venture with equity participation to manufacture and sell electrolyzers used in the production of green hydrogen.
“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 firms said in a statement.
The joint ventures will look to manufacture zero-carbon emitting hydrogen, which is used from refineries to steel plants to even running automobiles, via electrolysis powered by renewable energy.
The government in February this year, notified a green hydrogen policy aimed at boosting the 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 million tonnes by 2030 and around 40 per cent of the element produced in the country (around 5 million tonnes) will be green, as per the draft National Hydrogen Mission guidelines.
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 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.”