New Delhi: KKR-backed Hero Future Energies (HFE) is looking to invest ₹4,000 crore in green hydrogen projects, betting on growing demand from industries such as steel, cement and refining that are under pressure to cut emissions, founder and chairman Rahul Munjal said in an interview. The renewable energy firm is eyeing an early foothold in a business it expects to gain momentum over the next three to four years.
The proposed investment comes as the company looks to expand its clean energy portfolio through FY30, with a growing focus on hybrid, storage-backed and round-the-clock renewable power projects alongside solar and wind.
“Green hydrogen is an emerging growth area for us, and we continue to evaluate multi-megawatt projects for industrial applications and downstream derivatives such as green ammonia, focusing on hard-to-abate sectors,” Munjal told Mint. “In India, HFE is currently evaluating 50 MW electrolyser and 250 MW hybrid RE of upcoming capacity, with an estimated investment of ₹4,000 crore.”
Specific project details will be announced “as they mature”, he added.
On evolving technologies in the energy transition space and possibilities of green hydrogen emerging as a mainstream energy commodity, the HFE chairman said that in about four years, green hydrogen as a commodity and the related technologies and economics may mature and the company—with its experience from ongoing projects, including the facility at Rockman Industries in Tirupati in Andhra Pradesh—may be better placed to invest further in this space and develop largescale green hydrogen projects.
“In another three, four years, green hydrogen will become mainstay. And when that does happen, we would have had enough experience through this project and some other projects that we are doing to be able to do large-scale projects and to make that a proper business,” he said. "The idea is to get in early, to do projects, to understand the industry, so by the time the industry is ready for us, we know what we're talking about."
Green hydrogen, produced using renewable electricity, is emerging as a cleaner alternative to fossil fuels in hard-to-abate industries such as steel and cement, and can replace grey hydrogen in refineries and fertilizer factories.
Munjal said his company is currently working on two-three green hydrogen projects, including one with an Indian Institute of Technology.
In March last year, Andhra Pradesh chief minister N. Chandrababu Naidu had inaugurated the Tirupati green hydrogen project of HFE at Rockman Industries.
HFE's global portfolio is currently at 7.7 GWp (gigawatt peak) of renewable energy assets and 2.9 GWh (gigawatt hour) of battery energy storage capacity across India, Ukraine, Vietnam and the UK, including operating and under-development projects, with a significant share comprising firm and dispatchable renewable energy (FDRE) projects.
"The pipeline spans solar, wind, hybrid, RTC (round-the-clock) and storage-backed solutions, reflecting our growing focus on reliable and dispatchable renewable power. Majority of our offtakers are Central government-backed counterparties such as SECI (Solar Energy Corp of India Ltd), NTPC and NHPC," Munjal said.
He added that 80% of its current power generation capacity in India is utility-scale and caters to power distribution companies, and the remaining 20% is procured by commercial and industrial (C&I) consumers.
The company will also look at pumped storage projects (PSP) going ahead, as the demand for round-the-clock and on-demand power supply grows with the growing concerns over grid stability due to increasing renewable energy integration. These plants can absorb surplus renewable power during off-peak hours and release it when demand rises.
“We've looked at it in the past. In the last six months or one year, suddenly there's been more interest in this. We haven't yet got down to doing our homework yet, but we will not shy away. If we feel it makes sense now, we will look into it,” said the chairman, adding that the company is “not actively" looking at any such projects as of now.
Munjal said the company's plans for setting up PSP projects went on the backburner as the company focused more on solar projects in the past few years, given the fall in solar module prices. Going ahead, if PSPs emerge as a viable proposition, HFE may indeed foray into this space, he said, adding that it is a robust technology for energy storage and despatching of electricity in non-solar hours or whenever required. "If the numbers work, why not? It's a good business to be in," he said.
India has a pipeline of 122.77 GW of pumped storage capacity at various stages of development. The Central Electricity Authority has a roadmap to install another 100 GW of this capacity by 2035-36.