Oil India plans green hydrogen hubs in energy-transition bid

OIL is also looking to invest in bioethanol and traditional renewable energy projects, the firm’s chairman and managing director, Ranjit Rath, said in an interview.

In line with its energy-transition goals, the company aims to replace diesel use with natural gas across its group companies, like Numaligarh Refinery Ltd. Furthermore, it is exploring the potential for geothermal energy in the Himalayan region of Himachal Pradesh.

Geothermal energy in India is in its early stages and is yet to gain traction despite the potential to add 10 gigawatts (GW) capacity. “We have committed that OIL and Numaligarh Refinery will achieve net zero by 2040. We have earmarked a budget provision of around ₹25,000 crore for the initiative, including our efforts in terms of bioethanol, that is, 2G ethanol, our efforts to reduce gas flaring by creating infrastructure for the evacuation of natural gas, and feeding it to the North-East gas grid and the national gas grid."

Rath said the company will participate in plans to establish hydrogen valleys in India. In May, department of science and technology issued guidelines to set up hydrogen valley innovation clusters.

The department of science and technology defines a hydrogen valley as a defined geographical region where hydrogen will be serving multiple sectors and applications, including mobility, industry and energy, typically encompassing all essential aspects of a hydrogen value chain, including production to storage and transport and distribution to various end-users.

“So we have collaborated or agreed to partner with IIT Guwahati for a hydrogen valley concept in the North-East, and we have also partnered with IIT Bhubaneswar for a possible hydrogen valley. The concept is that a research organization will front-end it, and they need collaborations with industry partners. We evinced our interest for collaborations as the industry partner," Rath said.

Numaligarh Refinery has also issued a letter of award for about 2.4 kilotonnes per annum (ktpa). In September, the company unveiled its plans to invest ₹25,000 crore in its energy-transition initiatives, with the goal of establishing a green hydrogen production capacity of approximately 20 ktpa.

The company is also present in the solar and wind energy space, having a portfolio of 14 megawatts (MW) solar power capacity and 174.1MW of wind capacity.

Going ahead, the company will add solar capacity of 640MW in Assam and 150MW in Himachal Pradesh.

Rather than opting for inorganic growth, acquiring assets in the renewable energy space, OIL prefers joint ventures with state government entities, Rath said.

“In Assam, there is a local joint venture with a state government entity. In Himachal Pradesh, it’s the same model. We strongly believe that a local entity collaboration helps us to get traction in a state, and the power purchase agreement (PPA) becomes easier. So, we would do anything always in collaboration," he added.

India’s green energy sector, comprising solar and wind, to emerging sectors like green hydrogen, have seen greater interest over the past few years from both state-owned entities and private sector companies amid ambitious climate goals and net-zero targets.

Conventional energy firms, both in the oil and gas segment and power, are looking to diversify operations in the renewable space. Numaligarh Refinery is in the process of constructing a 2G ethanol facility using bamboo as feedstock, with the mechanical completion likely to be in place in December or by March 2024, Rath added.

In September, Rath said OIL was looking to invest around ₹8,000 crore in the 2G (second generation) ethanol segment.

Over the past few years, OIL has diversified into the alternative or renewable energy domain, especially in the wind and solar segments. The company’s entry into the wind energy domain comprises a 13.6MW wind energy power project commissioned at Ludurva, Jaisalmer, Rajasthan, in March 2012; 54MW power project at Dangri, Jaisalmer; and a 38MW project commissioned in Chandgarh, Madhya Pradesh, among others.