Gurugram-based renewable and new energy firm ACME Group plans to spend at least $3 billion (Rs 24,936 crore) on two of its marquee projects for green ammonia production in financial year 2024-25, Group President and Director Ashwani Dudeja told Moneycontrol in an exclusive interview.
In January, ACME Group and Japan’s heavy industry group, IHI Corporation, signed a pact for supply of green ammonia from Odisha to Japan. India aims to become one of the largest manufacturers of green hydrogen and green ammonia in the world and is offering incentives to attract private sector investments from companies such as ACME.
“We have four green ammonia projects in the pipeline, of which work on two projects would certainly begin in FY25. These are our Odisha and Oman projects. The combined project cost for the first phases of these two projects is estimated to be nearly $2.95 billion,” said Dudeja, who heads ACME Group’s green hydrogen and green ammonia businesses.
Projects and financing
ACME plans to build a portfolio of about 10 million tonnes of green ammonia or its equivalent in hydrogen production by 2030. The Group currently has a combined renewable energy portfolio of 8.5 gigawatts (GW).
The Odisha project, located in Gopalpur, is alone estimated to cost about $2.2 billion in its first phase, with green ammonia production capacity of 1.2 million metric tons per annum (MMTPA). The first production from the plant is likely to take place in 2027.
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In Oman, ACME plans to set up a green ammonia project with a total capacity of 9,00,000 tonnes a year (0.9 MMTPA), to be developed in phases. Norway-based Yara International has signed a binding agreement with the Group’s subsidiary for offtake of one lakh tonnes of green ammonia annually from the Oman unit.
Asked how the company plans to fund these projects, Dudeja said multiple private equity funds and large corporations have shown interest in participating in the Oman project. On the debt side, the company has already secured Rs 4,000 crore from state-owned REC Ltd for the project.
“For the Odisha project, due to some Japanese regulations, we might enter into a joint venture with the offtaker in Japan, giving them about 20-26 percent shareholding,” he said.
ACME also won the Government of India’s incentive scheme for green hydrogen production of 92,000 tonnes a year.
“We are going to utilise a majority of that (subsidy) in our Odisha project producing hydrogen and then ammonia from that hydrogen. But we will still have an additional hydrogen subsidy available, which we will use for some of our other projects that have not yet been identified or finalised,” Dudeja said.
The company has two other green ammonia production units in the pipeline, but the project costs have still not been ascertained due to ongoing design and engineering studies. They will be located in Texas and Tamil Nadu, and will have a capacity of 1.2 MMTPA each.
Green hydrogen push needs diplomatic initiatives
The union government approved the National Green Hydrogen Mission (NGHM) on January 4, 2023, hoping to become a leading global producer and exporter of green hydrogen, by producing 5 million metric tonnes (MMT) annually by 2030.
The Ministry of New and Renewable Energy (MNRE) accordingly rolled out the NGHM with an initial outlay of Rs 19,744 crore, of which Rs 17,490 crore is for incentives to produce green hydrogen (Rs 13,050 crore) and manufacture electrolysers (Rs 4,440 crore).
While the initiatives taken by the Indian government to accelerate green hydrogen adoption are ranked among the top in the world, the country still needs to do a lot in terms of inking bilateral agreements to ensure offtake of green hydrogen and its derivatives overseas.
“Most of the production of green hydrogen and green ammonia in the country initially will be focused towards exports rather than for consumption in India because India’s net zero goal is quite far (in 2070) as compared to many other countries,” Dudeja said.
“We need a lot of diplomatic initiatives. Some of those are simply about sending the right message to other countries—that India believes in honouring its contractual commitments,” Dudeja said. Such contractual commitments are required from India because one of the concerns that many buyers and countries have expressed is the potential of very large demand for energy coming from within the country.
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