Essar to invest Rs 30,000 cr in green hydrogen plant

Essar Group plans to invest Rs 30,000 crore over the next four years in setting up a green hydrogen plant at Jamnagar in Gujarat as the metals-to-infrastructure conglomerate eyes clean energy as a key pillar for its new phase of growth.

The conglomerate is looking to decarbonise its oil refinery in the UK, construct a green steel plant in Saudi Arabia, and build an LNG and electric ecosystem to decarbonise long-haul heavy trucks, Prashant Ruia, director of Essar Capital, which manages the group’s portfolio of investments, said.

It is also considering an entry into mining of critical minerals, mainly used in electric vehicle batteries, solar panels and wind-turbine magnets.

Essar Future Energy plans to develop 1 gigawatt of hydrogen capacity along with associated green molecules capacity of 1 million tonne per annum in Jamnagar over the next four years, he said.

Essar will use 4.5 GW of renewable energy by a sister concern Essar Renewables to split water molecules to produce hydrogen and oxygen. Hydrogen, the cleanest known source of energy in the world, so produced can be used to power vehicles, generate electricity, power industry and heat homes and businesses.

Hydrogen, which on burning produces only water, however cannot be shipped and is instead used to make green ammonia which can be easily transported.

The conglomerate, which turned debt-free in 2022 after selling some infrastructure assets, will expand its capacity to generate electricity from coal alongside building a renewable energy platform.

This includes Essar Power expanding its 1,200 MW Salaya-DevBhoomi Dwarka thermal power plant by an additional 1,600 MW to meet Gujarat’s base-load needs.

In the realm of green mobility solutions, Essar is focused on building an LNG and electric ecosystem to decarbonise long-haul heavy trucks, contributing to a cleaner transportation sector, he said.

It has a fleet of 450 to 500 LNG-powered trucks that are used by different industries for their logistics needs, he said.

Trucks are the biggest polluters on the road, producing some 110 tonne of carbon dioxide per truck. There are 4 million trucks in the country and the number are slated to double in the near future.

Replacing diesel in trucks with LNG, helps cut CO2 emissions by 30-35 per cent. Also, gas does not produce nitrogen oxides (NOx) and sulfur oxides (SOx) which cause acid rain and air pollution.

Essar is also building a retail network to supply liquefied natural gas (LNG) to trucks, he said adding LNG-powered trucks can run for 1,300-1,400 kilometers on a full tank while electric trucks have a range of around 150-km.