India's top oil firm IOC, engineering and construction giant Larsen & Toubro and renewable energy company ReNew Power on Monday came together to form a joint venture to develop green hydrogen business.
Indian Oil Corporation 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
India's top oil firm IOC, engineering and construction giant Larsen & Toubro and renewable energy company ReNew Power on Monday came together to form a joint venture to develop green hydrogen business.
Indian Oil Corporation (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, 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."
To help decarbonize the Indian industry, the new green hydrogen policy provides for the 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, SN Subrahmanyan, CEO & 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 has 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."
Commenting on the occasion, 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, however, the refineries will be the pivot around which India's green hydrogen revolution will materialize 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."