IndianOil, L&T and ReNew to form green hydrogen development JV


State-run fossil fuel giant Indian Oil Corporation Ltd (IndianOil), EPC solutions provider Larsen & Toubro (L&T), and renewable energy developer ReNew Power (ReNew) will form a joint venture (JV) company to develop green hydrogen projects in India.

The three majors have signed a binding term sheet to form this JV company with equal equity participation.

The tripartite venture will bring together the strong credentials of L&T 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.

In addition, IndianOil and L&T will form a JV with equity participation to manufacture and sell electrolyzers used in the production of Green Hydrogen. They signed a binding term sheet for the JV.

SN Subrahmanyan, CEO and MD, L&T, said, “India plans to march ahead in its decarbonization efforts rapidly, and production of green hydrogen is key in this endeavor. 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 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 a significant step in India’s quest for alternative energy. Addressing another gap in the Green Hydrogen manufacturing chain, IndianOil-L&T JV will focus on production and sale of Electrolyzer.”

“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.”

Indian Oil has the largest number of refineries in India. Through this JV with ReNew and L&T, the oil and gas major will have green hydrogen generation units installed at Mathura and Panipat refineries, to begin with.

Shrikant Madhav Vaidya, Chairman, IndianOil, said, “Being the Energy of India, we are committed to powering India’s drive towards carbon neutrality by leveraging the power of green hydrogen. IndianOil is forging this alliance to realize India’s green hydrogen aspirations, which is in sync with the Prime Minister’s vision of making India a Green Hydrogen generation and export hub.”

“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 will be the pivot around which India’s green hydrogen revolution will materialize substantially.”

Indian Oil has sought bids for green hydrogen generation units at its Mathura (Uttar Pradesh) and Panipat (Haryana) refineries last year. As per the tender document, green hydrogen at these units must be produced on a continuous basis (24 hours X 7 days) using renewable energy-powered water electrolysis.

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 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 timing for these proposed JVs is excellent as they will help support Government of India’s recently announced green hydrogen policy to boost India Inc.’s decarbonization journey.”

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.

Nearly all hydrogen produced in India today is grey. It is estimated that the demand for Hydrogen will be 12 MMT by 2030, and around 40% of the element produced in the country (around 5 MMT) 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 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 approx. 2 MMT of grey hydrogen every year, with IndianOil owning one of the largest shares of its refining output.

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