Larsen & Toubro’s (L&T), green molecules arm L&T Energy Greentech, has bagged the tender for building India’s biggest green hydrogen plant at Indian Oil Corporation Ltd’s (IOCL) Panipat refinery. Last month, it also commissioned the country’s first megawatt-scale green hydrogen plant for the Deendayal Port Authority (DPA) in Kandla. Moneycontrol spoke to L&T Energy Greentech’s CEO, Derek M Shah to know about the company’s growth plan at a time when the progress of India’s National Green Hydrogen Mission (NGHM) has been slow.
Shah also said that the company will diversify into fuel cell manufacturing and round-the-clock electricity solutions for data centres using green hydrogen. Besides, L&T Energy Greentech intends to expand its electrolyser manufacturing facility at Hazira, Surat to 1 gigawatt (GW) from the 400 MW at present.
Edited excerpts:
The NGHM has progressed at snail’s pace. The IOCL tender (mentioned above) which L&T Energy Greentech won itself took nearly two years to fructify. How does it impact your company, which is focused on providing end-to-end solutions on green hydrogen and its derivatives?
Globally, green hydrogen is at a nascent stage. When a change happens, there is always resistance to the change. It is often because somebody has to end up paying a higher cost and questions like who foots that bill arise for the technological disruption. Then financial institutions had to figure out how to provide capital for this sunrise sector, and then overall a lot of structure in policies and standards had to be brought in which took time from the launch of NGHM in January 2023.
But then there have been very strong moves by multiple countries, including Germany, Japan, and India, which has helped generate traction in the industry.
In India, with the first tender now out of the way, many more from oil marketing companies are now expected. Besides, the Ministry of New and Renewable Energy (MNRE) has also put out multiple bids for green ammonia which is gaining traction.
Also read: India achieves lowest ever price for green ammonia in maiden tender.
The Indian government is serious about its net zero target, which is why it is expected that NGHM will only see acceleration from hereon.
And on L&T’s growth plan in the sector amid all this?
We are looking at three parts of the value chain because we realised that if we want to be in this sector, we need to be in the space of technology and manufacturing as well.
First, we are manufacturing electrolysers and will make it in different types to cater to the growing market. We are the only company in India which is now manufacturing alkaline electrolysers with the entire supply chain from within the country. We will be looking at manufacturing fuel cells too.
Second is the engineering, procurement, and construction (EPC) space for green hydrogen and its derivatives, which is a stronghold of L&T. Some fresh news in this space is that we will soon get another order from Deendayal Port Authority (DPA) for setting up a 10 MW green hydrogen plant at their port facility. This will be in addition to the 1 MW plant we recently commissioned there.
Third is the development space which means we will set up large green hydrogen and green ammonia plants on our own. For example, our plan to develop a 1.8 million tonne per annum (MTPA) facility at Kandla port for which we have taken a large parcel of land.
We plan to replicate the same scale (1.8 MTPA) on the eastern side at Odisha’s Paradip port too.
In the larger spectrum, apart from refineries, we plan to offer green hydrogen as an energy storage solution for data centres, in mobility through fuel cells and shipping as well.
What kind of investment are we looking at for your mega projects planned at Kandla port and later at Paradip port?
For the Kandla port project it would be between Rs 35,000 crore and Rs 40,000 crore, but it will not happen in one go. In five to six years we will be able to finalise our investment for all the six phases.
After Kandla, we will build another 1.8 MTPA green ammonia plant at the Paradip port which will also need similar investment.
We are choosing ports because globally we have green corridors in shipping now. Paradip to Singapore and Rotterdam in Europe are all green corridors. At some point of time there will be a lot of restrictions on marine transportation to reduce emissions and for that port facilities will have to comply with multiple things. Hence, we are preparing for the future.
One major reason for a tepid response to the NGHM has been the lack of off-takers of green hydrogen. Have you signed off-take or procurement agreements for your own project in Kandla?
We are in discussion with multiple off-takers and we hope that by early next year we will conclude with one of them. We will likely announce the same by March 2026.
Overall, for export of green hydrogen and its derivatives, Europe will be a big market since they will also have the carbon border adjustment mechanism. Japan is another very strong area because Japan also needs to decarbonise its industries. South Korea is another country, Singapore also wants to do bunkering.
And what about electrolysers? Do you have export plans?
Yes, we are now looking at some export markets, especially in the Middle East where some projects are coming up.
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