State-run NTPC, which is set to start construction of its green hydrogen hub in Andhra Pradesh by the end of the month, is in talks with possible buyers of the green molecule.
NTPC is in talks with Japan’s EPC major Toyo Engineering Corp. and Norwegian power supply systems company Getek AS for offtake of the green hydrogen to be produced at the hub, said two people in the know of the developments. Further, Australian mining major Fortescue is in talks with NTPC to produce green hydrogen at its ₹1.85-trillion hub in Pudimadaka, Andhra Pradesh.
NTPC will offer companies the facility of producing green hydrogen at the hub, akin to the plug-and-play mode available at special economic zones.
“Initial talks have taken place with Toyo Engineering and Getek. The quantum and the rates are yet to be finalized. Fortescue has also shown interest in developing green hydrogen at the upcoming hub,” said one of the two people mentioned above.
Assured offtake
The development gains significance as assured offtake is key for green hydrogen producers as it is a highly capital-intensive commodity. Green hydrogen is produced with the help of renewable energy, so refineries and manufacturing of steel and metals like aluminium are key areas where it can be used.
Replying to a mailed query from Mint, a spokesperson with Fortescue said: “Fortescue is steadfast in its commitment to green hydrogen. We are focusing initially on four green hydrogen projects across Australia, the US, Norway and Brazil. We also have projects in Oman, Morocco, Egypt and Jordan which will follow our initial projects. Fortescue is also continuing to maintain a portfolio of other potential projects for the future, which will only progress if they can achieve economic viability, including low power costs and increased global demand for green hydrogen.”
Queries mailed to NTPC and Getek remained unanswered till press time. Toyo Engineering could not be reached immediately.
The foundation stone for the green hydrogen hub in Pudimadaka is expected to be laid on 29 November and operations are likely to start within the next three years, said a third person, who added that the green hydrogen hub will also include renewable energy generation capacity.
The investments in the green hydrogen space would be made through the IPO-bound subsidiary NTPC Green Energy Ltd (NGEL). The much-anticipated ₹10,000 crore public offer of NGEL opened on Tuesday and so far 33% of the shares on offer have been subscribed.
Green hydrogen focus
NTPC, India’s biggest power generation utility, has a major focus on the green hydrogen space as it looks to diversify into the new energy ecosystem. On 19 November, Mint reported that the company is eyeing a jump in investments in the green energy space to ₹5 trillion by 2030. The earlier plan was to invest about ₹1 trillion by FY27. This investment would go towards a range of green energy sectors including solar, wind power generation, green hydrogen, green ammonia, green methanol, ethanol, green urea and sustainable aviation fuel.
NGEL, the green energy arm is also taking the joint venture route to develop and supply green hydrogen. In June 2023, NGEL had incorporated a 50:50 JV with Indian Oil Corp. Ltd to supply the latter’s refineries with renewable energy for captive consumption. Later, in October, IOCL’s board approved an investment of up to ₹1,660.15 crore in the JV.
In June this year, Mint reported that NGEL is in talks with oil refiner and marketer Hindustan Petroleum Corp. Ltd (HPCL) and copper and aluminium maker Hindalco Industries to supply these companies with green hydrogen.
Both public sector and private sector companies in the energy space are looking at tapping the green hydrogen space given the ambitious net zero targets of the the companies. Further, with the focus on India’s net-zero target by 2070 and specific targets of the companies themselves, there is a major focus on adoption of green hydrogen in industries in place of grey hydrogen, which uses polluting inputs such as natural gas or methane.
India produces and consumes about 6 million tonnes of hydrogen, currently, most of which is grey hydrogen.
