INTERVIEW: India's Avaada plans renewable hydrogen, derivative projects by 2030

Indian renewable energy firm Avaada is planning vertically integrated renewable hydrogen and derivatives projects with the first to be operational by 2026-2027, Avaada's chairman Vineet Mittal told S&P Global Commodity Insights Aug. 16.

The Mumbai-based company has a memorandum of understanding with India's Rajasthan state for a 1 million mt/year renewable ammonia plant and recently signed another MOU with the federal government's REC for a $2.44 billion loan.

"Avaada Group plans to add significant capacities for green fuels by end of 2030 -- this will be a combination of green hydrogen/ammonia, renewable methanol, sustainable aviation fuel and any other green derivatives," Mittal said in written replies to S&P Global's queries.

The first project is planned to be operational in the next 3-4 years with additional units online before 2030, he said.

The funds raised by REC come "either directly or via the line of credit from KfW and World Bank," Avaada said after signing its MOU on July 20 on the sidelines of the G20 Energy Ministers' Meeting in Goa. It will fund multiple renewable projects over the next five years.

The group, with 4 GW operational solar power plants, came into the limelight in August 2022 when it signed the MOU with Rajasthan for its renewable ammonia project in Kota at a cost of Rupee 400 billion ($4.81 billion).

This unit will be for "catering to domestic demand... the market in India is still under development and future looks promising," Mittal said.

Avaada also has a 1.25 GW solar plant in Bikaner, Rajasthan. Its other solar plants are in states such as Uttar Pradesh, Tamil Nadu, Karnataka and Bihar, and it aims to grow its solar portfolio to 30 GW by 2030.

Platts assessed Middle East renewable derived ammonia delivered into Far East (with high cost and freight) at $786.65/mt Aug. 14, up 0.64% from a month ago, S&P Global data showed.

The Platts-assessed Middle East renewable derived ammonia delivered into Northwest Europe (with high cost and freight) stood at $802.65/mt Aug. 14, up 0.50% from the previous month.

Fund raising continues

Mittal said the group was scouting for more funds for its new fuel projects.

"We have raised equity capital from Brookfield primarily to develop our green hydrogen ventures. In addition, we are also in touch with many other investment funds to provide capital," he said. "Similarly, on the debt side, there are discussions happening with multiple banks and financial institutions."

Brookfield Renewables, through its Brookfield Global Transition Fund, committed to investing up to Rupee 82.25 billion in the Avaada group, information on Avaada's website showed.

In addition, Avaada recently announced the successful closure of a Rupee 107 billion funding round.

Meanwhile, Global Power Synergy Public Company, an existing shareholder in Avaada's renewables business, pledged to increase its capital by investing an additional Rupee 24.75 billion.

Over the next five years Avaada is primed to harness this investment to spearhead renewable energy projects across India, it said.

"We raised capital for all our lines of businesses -- manufacturing, renewable energy and production of green hydrogen/ammonia. Owing to confidentiality clauses with investors, we cannot share the split across businesses," Mittal said.

"We won the Production-Linked Incentive bid, which comprises an integrated 3 GW ingots (and) module facility. We completed most of the preparatory work and are in the middle of discussions with a few states for locating of solar manufacturing plants," he added.

The Indian government made an allocation of Rupee 195 billion for PLI for manufacturing high efficiency solar PV modules in the 2022-23 budget, following which Solar Energy Corp of India issued a tender and announced results in May.

Electrolysers

Mittal said he was evaluating SECI's electrolysis manufacturing tender issued in July under the government's Strategic Interventions for Green Hydrogen Transition Scheme, part of the National Green Hydrogen Mission with an outlay of Rupee 197.44 billion up to 2029-30.

"The group has already taken a conscious decision to own and setup a manufacturing capacity of electrolysers in India. As far as this tender goes, we are evaluating it... the decision to participate will be taken at an appropriate time," Mittal said.

The company was technology agnostic and would choose the most mature and efficient electrolysis option to give the lowest cost of renewable hydrogen, he added.

Avaada was in discussions with various offtakers in India as well as in the EU and Asia, according to Mittal. Prospective buyers included a mix of end-users from fertilizer, chemicals, steel and shipping sectors as well as brokers.

"The natural advantage India has in the areas of low-cost, large scale renewable energy projects, robust transmission network, availability of skilled and abundant manpower, supportive government policies and incentives, availability of abundant renewable energy sources will make India one of the best countries to meet global demand for green molecules," Mittal said.

The company planned to "take a decision to have a physical presence in the US at an appropriate time", though it was keen to pursue export opportunities to the US especially for solar modules, Mittal said, ruling out any project possibilities in the Middle East and Australia at this time.