Firms earmark $35bn for Indian green H2 in Karnataka

Spanish Market: Fertilizers, Hydrogen
03/11/22

Seven companies are planning to invest a total of 2.9 trillion Indian rupees (around $35bn) in green hydrogen and ammonia projects in the southwest Indian state of Karnataka.

The state government said at the Invest Karnataka Summit 2022 in Bangalore on 2 November that it has signed initial agreements with the companies, the majority of which are headquartered in India.

Details were not provided on all planned projects, but five could produce nearly 5mn t/yr of green ammonia. ABC Cleantech, a subsidiary of solar and wind energy firm Axis Energy, plans a facility that would produce 200,000 t/yr of hydrogen and 1mn t/yr of ammonia, fed by 5GW of renewable energy. Renewable energy firms Avaada and ReNew Power are each targeting 1mn t/yr of ammonia production, and renewable project developer Acme Cleantech Solutions is eyeing 1.2mn t/yr through a plant it first announced in June that is slated for completion in 2027.

Malaysia's state-owned Petronas, the only company involved headquartered outside in India, intends to build a plant that will eventually produce 500,000 t/yr of ammonia.

The group of seven firms is completed by conglomerate JSW Group's energy arm and renewables firm O2Power. No production targets were given for their projects, although the former's planned investment is not far off those aimed for by Avaada and ReNew Power, suggesting it may be eyeing output in a range that is broadly similar (see table).

Speakers at the Invest Karnataka Summit 2022, such as JSW Group's chairman and managing director Sajjan Jindal, said Karnataka state stood out in India for ease of doing business. Besides this, large areas of the state have wind speeds that are well above the Indian national average, which — combined with ample sunshine — could allow for extensive utilisation of electrolysers, further increasing Karnataka's attractiveness for production of hydrogen and its derivatives.

As a result Karnataka could be key to India fulfilling its hydrogen ambitions. The country's national hydrogen roadmap set a production target of 5mn t/yr by 2030, although some organisations, including government think-tank Niti Aayog, have since called for more ambitious goals.

The government plans to introduce production-linked incentive (PLI) schemes for electrolyser manufacturing and for the "initial 4mn-5mn t/yr" of renewable hydrogen output, India's minister for new and renewable energy Raj Kumar Singh said last month. This could further incentivise domestic hydrogen production from renewable sources, which is already among the least expensive in the world. Argus calculates prevailing production costs in India using a 100MW proton exchange membrane electrolyser fed by directly-connected wind and solar installations at just under $5/kg, including recovery of capital costs.

By Stefan Krümpelmann

Initial agreements for green hydrogen, ammonia projects in Karnataka
Company	Investment in bn Indian rupees	Investment in bn USD	Ammonia output target in mn t/yr

Acme Cleantech Solutions	519	6.26	1.2
ReNew Power	500	6.03	1.0
ABC Cleantech	500	6.03	1.0
Avaada Energy	450	5.43	1.0
JSW Energy	434	5.24	-
Petronas	312	3.76	0.5
O2Power	178	2.15	-
— Karnataka state government

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