TotalEnergies and Ahmedabad-based Adani Enterprises, headed by billionaire Gautam Adani, have struck a hugely significant deal to invest $50 billion in green hydrogen production in India, with the initial goal of producing 1 million tonnes per annum by 2030 using 30 gigawatts of new renewable power generation feedstock.
The deal builds on a four-year strategic alliance the two companies have established in the Indian liquefied natural gas and solar power sectors and will see French supermajor TotalEnergies acquire a 25% stake in Adani New Industries Limited (ANIL) which was formed recently to invest in the nascent green hydrogen business.
Formed this January, ANIL aims to “deliver the largest green hydrogen ecosystem in the world, which will enable the lowest green hydrogen cost to the consumer”, according to TotalEnergies.
Adani Enterprises said in a statement to the BSE — Mumbai’s stock exchange — that ANIL will “be the largest fully integrated green hydrogen player in the world, with presence across the entire value chain, from the manufacturing of renewables and green hydrogen equipment [such as solar panels, wind turbines and electrolysers] to the large scale generation of green hydrogen, to downstream facilities producing green hydrogen derivatives”.
The value of TotalEnergies’ investment was not revealed, but with ANIL set to invest $50 billion in the green hydrogen business in India over the next 10 years, the French giant will have to come up with $12.5 billion of this amount, based on its 25% stake.
According to TotalEnergies, in order to control green hydrogen production costs, ANIL will be integrated along the value chain, from the manufacturing of equipment needed to generate renewable power and produce green hydrogen, to the production of green hydrogen itself and its transformation into derivatives, including fertilisers and methanol, both for the domestic market and export.
ANIL’s first target is to develop a project to produce 1.3 million tpa of urea derived from green hydrogen for the Indian domestic market — substituting imports — and will invest around $5 billion in a 2 GW electrolyser fed by renewable power from a 4 GW solar and wind farm.
Last month Adani’s chief financial officer Robbie Singh told analysts that the company, through ANIL, aims to produce 1 kilogram of hydrogen for a price of $1.
Speaking in the company’s fourth quarter conference call in early May, he said: “It is not market share we are chasing here. We are chasing the lowest cost, lowest hydrogen price and…our own production capacity. Our first plan [is to produce] 3 million tonnes of hydrogen.”
“We should have the first hydrogen somewhere in 2025-26,” he added, pointing out the goal for the $50 billion investment is to produce 3.3 million tpa.
TotalEnergies chief executive Patrick Pouyanne described the deal as a “major milestone in implementing our low carbon hydrogen strategy, where we want not only to decarbonise the hydrogen used in our European refineries by 2030, but also to pioneer the mass production of green hydrogen to meet demand, as the market will take off by the end of this decade”.
“We are very pleased with this agreement, which further strengthens our alliance with the Adani Group in India and contributes to the valorisation of India’s abundant, low-cost renewable power potential,” he added.
Pouyanne pointed out that the future production capacity of 1 million tpa of green hydrogen would represent “a major step in increasing TotalEnergies’ share of new decarbonised molecules — including biofuels, biogas, hydrogen, and e-fuels — to 25% of its energy production and sales by 2050”.
Adani Group chairman Gautam Adani said: “The strategic value of the Adani-TotalEnergies relationship is immense at both the business level and the ambition level.
“In our journey to become the largest green hydrogen player in the world, the partnership with TotalEnergies adds several dimensions that include R&D, market reach and an understanding of the end consumer [and] fundamentally allows us to shape market demand. This is why I find the continued extension of our partnership to hold such great value.
“Our confidence in our ability to produce the world’s least expensive electron is what will drive our ability to produce the world’s least expensive green hydrogen. This partnership will open up a number of exciting downstream pathways.”
India has set a nationwide target to produce 5 million tonnes of green hydrogen by 2030 and to become a production and export centre for renewable hydrogen.
The government in New Delhi has agreed to waive inter-state electricity transmission fees for green hydrogen projects for 25 years and give projects priority status for grid connection.
Meanwhile, in Rajasthan, AHEJOL, a subsidiary of Adani Green Energy has started operations of India's first wind-solar hybrid power plant in Jaisalmer.
Adani called it the world’s largest hybrid renewable project at a single location that aims to generate up to 390 MW of power.
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