Infrastructure giant Larsen & Toubro (L&T) has embarked on a significant expansion in the green energy sector, securing nearly 600 acres at Kandla port in Gujarat and actively seeking additional land in Odisha. This strategic move aims to establish export-oriented green hydrogen and ammonia projects, leveraging L&T’s extensive capabilities as both a contractor and project developer.
Strategic Acquisition for Export Market Access
Subramanian Sarma, President, Energy, and Wholetime Director at L&T, emphasized the importance of land acquisition in positioning the company for future opportunities in the green energy sector. “To enter the export or even domestic market as a developer, securing land is crucial. We are positioning ourselves to acquire land parcels now, so we are prepared when opportunities arise,” Sarma stated in an exclusive interview with a Media Channel.
The 500-600 acres at Kandla port, allocated for a 99-year lease, will facilitate access to both domestic and export markets. In parallel, L&T is exploring land acquisition on the eastern coast, particularly in Odisha, ensuring optimal connectivity and logistical efficiency for its operations across India and beyond.
Green Hydrogen and Ammonia Initiatives
L&T’s strategy focuses on creating a state-of-the-art electrolyser manufacturing facility and executing engineering, procurement, and construction (EPC) projects. The company has invested approximately Rs 500 crore in electrolyser manufacturing, with the first sales expected to commence in September. “We’ve already secured our first order from the pharmaceutical industry and identified more potential users and opportunities,” Sarma revealed.
While L&T is keen on exporting green ammonia, it plans to establish a facility only with confirmed offtake agreements. Discussions are underway with end-users in Korea, Japan, and Europe. “We will not invest until we have an offtake agreement. We want to invest, and with most of the agreements being for export, we anticipate that 10-15% of the project cost will be our investment, with the remainder funded by the end-user,” Sarma explained, indicating a potential investment of Rs 1,000 to Rs 2,000 crore to solidify L&T’s market position.
Pioneering Green Energy Projects
In March, L&T commissioned its first indigenously manufactured hydrogen electrolyser at the A M Naik Heavy Engineering Complex in Hazira, Gujarat. L&T Electrolysers Limited, a new subsidiary, focuses on manufacturing pressurised alkaline electrolysers using technology from McPhy Energy, France.
L&T is committed to undertaking EPC projects, leveraging its core competencies to capitalize on the global shift towards renewable energy. Green projects already contribute 40% of the firm’s revenues, with expectations to reach 50% soon.
National Green Hydrogen Mission
India’s push towards green hydrogen gained momentum with the union cabinet’s approval of the National Green Hydrogen Mission, with an initial outlay of Rs 19,744 crore. This initiative aims to position India as a global hub for clean energy manufacturing. Success in this space hinges on effective government incentives and the creation of local demand.
L&T’s proactive steps in securing land and investing in green hydrogen and ammonia projects underline its commitment to sustainability and position it as a key player in India’s renewable energy transition.
Prasanta Patnaik