Larsen & Toubro Limited (L&T) and its green hydrogen joint venture (JV) partners viz. Indian Oil Corporation Limited (IOCL) and ReNew Power, will invest upto USD 4 billion (Rs 32,000 crore) in their green hydrogen businesses over next three to five years.
- This is a part of the L&T’s plans to invest around USD 12 billion over the next five years.
Focus:
The focus of this collaboration is to harness the potential of green hydrogen, a clean and sustainable alternative to traditional fossil fuels.
Key Points:
i.L&T has approached some coastal states in India to acquire 500-1,000 acres of land for hydrogen facilities.
ii.The venture into hydrogen production will commence with the manufacturing of electrolyzers, scheduled to begin operations in December 2023.
iii.These electrolyzers will utilize renewable energy from ReNew Power Private Ltd. to produce green hydrogen at the IOCL refinery in Panipat, Haryana.
iv.The project will subsequently be expanded to other IOCL refineries and L&T customers.
Note:
The clean energy strategy will be led by L&T Energy Green Tech, a subsidiary of L&T.
Additional info:
i.The key part of this investment involves allocating approximately Rs 500 crore towards the development of electrolysers.
- Electrolysers are components in the production of green hydrogen, as they facilitate the separation of hydrogen from water using renewable electricity sources, thus ensuring a more eco-friendly energy creation process.
ii.L&T has set up a hydrogen plant in Hazira, Gujarat in 2022 and has partnered with IOCL to manufacture electrolysers.
iii.In 2023, L&T signed an agreement with Norway-based H2Carrier to develop floating green ammonia projects for industrial-scale applications.
- L&T also entered into a manufacturing agreement with France-based McPhy Energy for the production of electrolysers using McPhy’s technology.
L&T to buy out NPCIL stake in L&T Special Steel and Heavy Forging
L&T is also looking to procure 26% stake that Nuclear Power Corporation of India (NPCIL) currently holds in L&T Special Steel and Heavy Forging. In pursuit of this acquisition, L&T is prepared to invest approximately Rs 150 crore.
- L&T Special Steels and Heavy Forgings is a Joint Venture of L&T and Nuclear Power Corporation of India Limited.
Reason behind this move:
L&T has a forge shop that plays a critical role in the production of nuclear and defense-oriented items. However, the presence of NPCI’s stake has posed challenges, hindering L&T’s efforts to broaden its horizons. The nuclear plant connected to the JV accumulated loss of nearly Rs 3,000 crore. Recognizing the need for a shift, L&T has initiated discussions with NPCI regarding the potential sale of the shareholdings.
Recent Related News:
i.To strengthen defence ties with India, the government of the USA has signed a formal framework agreement on naval ship repair with Larsen & Toubro, the Indian defense shipbuilder.
ii.L&T Technology Services Limited (LTTS) has partnered with Bharat Sanchar Nigam
Limited (BSNL) to provide private 5G (Fifth-generation) network solutions for global enterprises providing faster connection speed and lower latency.
About Larsen & Toubro Limited (L&T):
Chief Executive Officer & Managing Director– Sekharipuram Narayanan Subrahmanyan
Headquarter– Mumbai, Maharashtra
