L&T to transition Power EPC business to carbon light from carbon forward

Raman said that L&T is trying to migrate from carbon heavy energy to carbon light energy to green energy.

Engineering and infrastructure conglomerate Larsen & Toubro (L&T), on July 24, announced that it is repurposing its power engineering, procurement, and construction business to focus on more carbon light solutions.

"As a part of our transition to new energy business, we are repurposing the power EPC business to carbon light solutions under the energy segment," L&T’s chief financial officer R Shankar Raman said on July 24.

Raman while speaking on the company’s post Q1FY25 earnings conference call said that going forward Larsen & Toubro will focus more on carbon capture equipment or carbon capture projects, biofuel equipment or biofuel projects, and gas to energy projects.

"Going forward, we would report under the energy projects segment both hydrocarbon as well as carbon light solutions in addition to the green energy EPC business that we run," Raman said.

He added that L&T is looking to capture the market in India which will help the country transit towards cleaner energy.

Earlier this month, Subramanian Sarma, the company's President, Energy, and Wholetime Director, told Moneycontrol that L&T plans to develop greenfield projects at ports for easy access to the export market, to capitalise on the global shift towards renewable energy and sustainable practices.

The conglomerate's plans to acquire land on both the eastern and western coasts of India signals a move to ensure good connectivity for its operations, logistical efficiency, and market access across India and beyond.

L&T’s strategy for green hydrogen and ammonia focusses on establishing a state-of-the-art electrolyser manufacturing facility and executing engineering, procurement, and construction (EPC) projects.

The company, which has been focussed on its asset-light engineering business, is also looking to invest in green hydrogen and ammonia manufacturing as a project developer for the Indian and export markets.

Similarly, Raman added the company is looking to help thermal power projects transition towards cleaner fuel.

"Let's start working on solutions which involves carbon capture, which involves biofuels, which involves gas to energy," Raman said.

He added that while L&T is not creating a new division, the company plans to repurpose its existing division.

Raman added that the size of the new market for L&T will depend on the willingness of current thermal power operators to transition to cleaner energy.

The CFO of the the engineering conglomerate also added that L&T has taken its learning from executing renewable energy projects in the Middle East and is now looking to implement the same in the Indian market.

"Many Middle Eastern countries are using the money from petrol, and crude oil to set up renewable energy projects, and that has created a large market for companies like L&T. We expect this market to grow in India as well," Raman said.

Earlier this month, L&T had announced that its renewable energy arm has bagged two orders from a leading developer in the Middle East to build two Gigawatt scale Solar PV plants.

L&T did not reveal the financial details of the contract, but as per its project classification, the value of a mega order ranges between Rs 10,000 to Rs 15,000 crore.

The plants will have a cumulative capacity of 3.5 GW. The scope of the orders also includes grid interconnections encompassing pooling substations and overhead transmission lines.