Indian Oil Corporation has announced two separate joint ventures for developing the green hydrogen sector in India, and to manufacture electrolyzers, respectively. IOC’s partners in this endeavour will be Larsen & Toubro Ltd (L&T) and ReNew Power.
First joint venture
The first joint venture will be a tripartite partnership between IOC, L&T and ReNew Power. These three entities have signed a binding term sheet for the formation of a joint venture company to develop the nascent green hydrogen sector in India, a release from L&T said.
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.
Second joint venture
IOC and L&T have signed a binding term sheet to form a joint venture with equity participation to manufacture and sale of electrolyzers in the production of green hydrogen.
Cost-effective green hydrogen
“Both these JVs aim to enable the nation’s ‘Aatmanirbhar Bharat’ mission to rapidly build, expand and bring in economies of scale to make green hydrogen a cost-effective energy carrier and a chemical feedstock for many sectors,” noted SN Subrahmanyan, CEO & MD, Larsen & Toubro. 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.
Eco-friendly fuel
The central government 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 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.
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The roadmap
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 country’s refining sector consumes approximately 2 million tonnes of grey hydrogen every year, with IOC owning one of the largest shares of its refining output.
Government support
To help decarbonize Indian industry, the new green hydrogen policy provides for the waiver of interstate transmission system (ISTS) 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. The Union power ministry has also provided a single-window-clearance portal for all clearances and open access on priority to green hydrogen projects.
