Adani Group eyes 5 GW electrolyzer capacity with up to $3 bn investment

The company, which plans to set up the initial 2 GW capacity by FY25, would manufacture indigenous alkaline electrolyzers, under the government’s Strategic Interventions for Green Hydrogen Transition (SIGHT) scheme of the hydrogen mission.

Adani New would initially set up about 198.5 MW capacity and receive an incentive of up to ₹293.78 crore from the government under the scheme.

The government, under the SIGHT scheme, gives alkaline electrolyzer manufacturers incentives for five years till FY30. Companies need to set up facilities within two years after receiving the letter of award under the plan.

Alkaline electrolyzers are used for producing green hydrogen and are said to result in lower expenses compared to other commonly used technologies, including proton exchange membrane.

“After the pilot project is successfully executed, the company plans to initially set up 2 GW capacity for commercial operations, which would then be ramped up to a minimum of 5 GW,” said one of the persons cited above.

Another person with knowledge of the developments said electrolyzer manufacturing cost for per kilowatt (kw) capacity stands at around $600, and the group would have to invest around $3 billion for the 5 GW capacity.

Queries sent to Adani New Industries Ltd remained unanswered till press time.

The company has also tied up with electrolyzer technology providers Cavendish Renewable Technology (Australia) and Hydep (Italy) for the alkaline-based technology. It is also working on anion exchange membrane (AEM) technologies, wherein prototypes are being prepared.

In a presentation in March, Adani New Industries had said that among the three technologies being tried and tested, the alkaline-based and AEB-based technologies are the most preferred. 

The second person mentioned above noted that the company is now zeroing in on alkaline-based technology.

According to the March presentation, a 5 MW size electrolyzer pilot based on alkaline technology is already underway. The company plans to set up its manufacturing facility by 2025 and is also looking at developing the supply chain required for achieving 90% indigenization of electrolyzers.

The push towards indigenous electrolyzer capacity comes in the backdrop of the company’s plans to expand footprint in the green hydrogen space.

India consumes about 6 million tonne of grey hydrogen per annum, across fertilizer, refining, steel and methanol, which can be replaced with green hydrogen.

However, a key requirement is that the cost of its production needs to come down. The expenditure of manufacturing electrolyzers forms a major part of cost of green hydrogen production, making both private players and the government push for scaling up domestic electrolyzer production.

Grey hydrogen is produced from polluting resources such as natural gas and methane, while green hydrogen is produced from renewable energy sources from wind and solar.

Under the National Green Hydrogen Mission, the government aims to have a capacity of 5 million metric tonne of annual green hydrogen production with a capacity of 60-100 GW of electrolyzer manufacturing.

Several other private companies have ventured into this nascent space hoping to ride on the market potential for green hydrogen.

Reliance Industries is investing about $10 billion in its new energy ecosystem including green hydrogen. The company is developing a giga complex in Jamnagar, Gujarat with five giga factories for photovoltaic panels, fuel cell system, green hydrogen, energy storage and power electronics. Its arm Reliance Electrolyzer Manufacturing Ltd has also been selected under the SIGHT scheme to develop electrolyzers.

Other companies in the space include Avaada GreenH2 Private Ltd, ACME Cleantech Solutions, and Greenko Zero.

Shares of Adani Green were trading 0.8% lower at ₹1,783.20 on the National Stock Exchange in early trade on Thursday in a largely positive market.