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Acme eyes 10 million tonnes green hydrogen, ammonia capacity by 2030, Chairman Manoj Upadhyay says

India’s hydrogen energy ecosystem can be worth $2-3 trillion in the next 20-25 years, and the country has an excellent opportunity to become a significant exporter of green hydrogen, Upadyay says.

August 27, 2021 / 06:36 PM IST

The Acme group is bullish on green hydrogen and ammonia, which are expected to have a key role in the global transition to clean energy, and aims to be a major producer with annual capacities of about 10 million tonnes by 2030, chairman and founder of the group Manoj Upadyay said.

 In an interview with Moneycontrol, Upadhyay welcomed Prime Minister Narendra Modi’s recent announcement of the national hydrogen mission and said demand would initially be driven by government policies.

 Edited excerpts:

Tell us about your plans to diversify into green hydrogen and ammonia.

We are proud and happy to hear the announcement by our Prime Minister on the National Hydrogen mission. ACME Group has recently commissioned the world’s first integrated commercial-scale pilot plant for green hydrogen production in Rajasthan. The plant will help in saving approximately 4,400 tons/annum of CO2 emission. Green hydrogen will be produced using 5 MWp (MegaWatt -Peak) from the solar plant scalable to 10 MWp, which is an integral part of the project. 

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ACME is also developing one of the world’s largest green ammonia projects at SEZ (Special Economic Zone) at Port of Duqm in Oman. The plant will be an integrated facility using 3 GWp (Giga Watt-Peak) of solar and 0.5 GWp of wind energy to produce 2400 TPD (Temperature Programmed Desorption) of green ammonia with an annual production of approx. 0.9 million tons.

The facility in Oman is being built to export green ammonia to demand centres like Europe and Asia with an investment of about $3.5 billion. 

What do you think are the demand centres of these fuels globally?

Currently, the key markets include Europe and Asia. Europe is at the forefront in the decarbonization effort, followed by countries like Japan and South Korea. There is a major push to decarbonization in these geographies in the existing industries, which use grey hydrogen or grey ammonia in their final products. 

Also, new users of green fuel are emerging in sectors like long-haul trucking, power generation, sustainable aviation fuel, etc. Japan is leading the way in validation of ammonia blending with coal in thermal power plants. This step will create a huge demand for green ammonia and will pave the way for not shutting down the existing thermal units but running them effectively on the greener fuel. Going forward we see such demands also arising in India (a major ammonia consumer) as well as the Americas.

What will be the demand for green hydrogen and ammonia in the next one-two decades?

As per different estimates and net-zero targets being taken by various countries for 2030 and 2050, the Green hydrogen ecosystem will be a 12-13 trillion dollar industry by 2050. It can be an excellent opportunity for India to become a significant exporter of green hydrogen, helping the world reduce carbon emissions and creating local jobs and wealth.

What is the outlook for green hydrogen and ammonia demand in India?

Mass deployment of renewable energy in India helped us produce electricity cheaper than any other source of energy. Similar deployment of green hydrogen at the lowest cost will help us in a cost leadership position, not only to meet our green hydrogen and ammonia demand internally, but we can also become a major exporter of green hydrogen and green ammonia worldwide. This initiative on green hydrogen can help us to build an ecosystem of a 2-3 trillion dollar industry in the next 20-25 years.

What are the key factors that will make the Indian industries shift to green hydrogen and ammonia?

The first thing is the implementation of the RED  II (Renewable Energy Directive) directive and carbon border tax mechanism in Europe. Any exporter will have to specify the quantity of carbon emission in the manufacturing of the product. So that will drive the industry to shift to cleaner fuels. On the second level, in India, we are very sensitive to the cost. Gas prices have shot up in the past year. With the world focusing on green sources of energy, there will be limited investments in oil and gas exploration. If you are able to offer a cheaper solution to your customers, they will take it. I think a policy-driven approach where carbon will get taxed pushing more investments into green technologies, will make green fuels cheaper. For instance, now solar power has become much cheaper than other sources. 

Acme has invested in a plant in Rajasthan. How do you plan your future investments?

Globally, there are plans to set up capacities to the tune of 30-35 million tonnes per annum by 2030. Acme Group aims to be a major producer of green hydrogen and green ammonia globally and plans to have capacities of ~ 10 million tonnes per annum by 2030.

How dependent are your investment decisions on Government policies?

Government policies will drive the initial demand. Post that, as you build more and more capacity; your learning improves and the product becomes more popular and customers accept it.

The production of green hydrogen can be costly. How do you plan to keep the product competitively priced and can the Government support you in it?

First of all, green hydrogen is not costly. It is a myth. I am willing to sell at less than $2 a kg from my Oman plant. Our initial demand will help us to create the infrastructure here, but we must know who our competitors are. Our competitors are in Australia, with 10 percent more solar irradiance, the Middle East have 20 percent more and South America have 30 percent more irradiance. To become a global hub, we need a policy that allows competing with these three geographies. We can look at our tax, various logistic costs and all possible regulations to make it so friendly that the advantages of those countries in terms of higher irradiance can be compensated. 

Do you think hydrogen can be a fuel for personal mobility? 

I see that in the value chain of energy. Right now, hydrogen has to compete with batteries and fossil fuels. Hydrogen fuel cell vehicles would first be adopted in the long haul transportation system (like marine, trucks), as electric vehicles have their limitation of charging infrastructure especially for long routes which are typically done by good carriers. Eventually, as the ecosystem develops and larger adoption happens, this would help in bringing economies of scale and a large demand especially in large cities which are already facing air pollution challenges. Hydrogen vehicles in countries like India which are major oil importers will make more sense going forward and will create a large new demand for green hydrogen to start within cities and eventually to other parts of the country. We will also see the adaption of green ammonia/hydrogen combustion engines for marine, power generation etc.
first published: Aug 27, 2021 06:36 pm
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