Essar Group, a conglomerate with interests spanning metals to infrastructure, has announced an ambitious plan to invest Rs 30,000 crore over the next four years in a green hydrogen plant in Jamnagar, Gujarat.
Essar’s green hydrogen project aims to develop 1 gigawatt of hydrogen capacity and produce 1 million tonnes of green molecules per annum by 2028. This project is part of a broader strategy to decarbonize its operations, including an oil refinery in the UK, a green steel plant in Saudi Arabia, and an LNG-electric ecosystem for decarbonizing heavy trucks.
While these goals are ambitious, they must be viewed against global industry benchmarks. For example, Europe’s hydrogen strategy, outlined by the European Commission, targets the production of up to 10 million tonnes of renewable hydrogen by 2030, supported by significant financial commitments and regulatory frameworks. Essar’s project, although significant, represents a smaller but noteworthy contribution to the global hydrogen economy.
The technological backbone of Essar’s project involves using 4.5 GW of renewable energy from Essar Renewables to electrolyze water into hydrogen and oxygen. The clean hydrogen produced can be utilized across various sectors, including transportation, power generation, and industrial processes. However, hydrogen’s storage and transportation remain critical challenges. Unlike traditional fuels, hydrogen is challenging to ship and is often converted into green ammonia for transport.
Prashant Ruia, director of Essar Capital, emphasized the goal of producing green molecules directly rather than converting hydrogen into green ammonia, to avoid high conversion costs. This approach, while innovative, requires significant infrastructure development and technological advancements to be cost-effective and scalable.
Essar’s foray into green hydrogen is expected to have substantial economic and environmental impacts. The investment is likely to generate employment, boost local economies, and position India as a significant player in the global green hydrogen market. Moreover, the environmental benefits of green hydrogen, which emits only water upon combustion, align with global decarbonization goals and the Paris Agreement targets.
However, the project’s success hinges on various factors, including the cost of renewable energy, technological efficiency, and market demand for green hydrogen and its derivatives. Additionally, the transition from traditional energy sources to green hydrogen must be managed carefully to mitigate any adverse social or economic impacts on communities dependent on fossil fuel industries.
Essar’s green hydrogen initiative is part of a larger trend where major corporations are increasingly investing in clean energy solutions. This shift is driven by both regulatory pressures and market opportunities as industries seek to reduce carbon footprints and tap into emerging green markets.
The plan to develop a green steel plant in Saudi Arabia and enter the mining of critical minerals for electric vehicle batteries and renewable energy technologies indicates a comprehensive strategy to integrate green hydrogen across multiple sectors. This diversification could enhance Essar’s competitiveness and resilience in the evolving energy landscape.
