INTERVIEW: Welspun targets 1 mil mt/y India renewable ammonia capacity by 2030

Welspun New Energy is advancing its Indian projects with the goal of achieving 1 million metric tons/year renewable ammonia capacity by 2030, while anticipating renewable hydrogen costs below $2/kg due to improving technology and lower energy prices, according to executive director and CEO Kapil Maheshwari.

The company, which has two renewable hydrogen/ammonia projects located near Kandla port in Gujarat and Paradeep port in Odisha, is among several large Indian developers seeking to export the fuel to Europe and Asia by leveraging favorable costs and supportive policies.

"We have ensured infrastructure readiness [of] 20,000 acres of land for renewables and land at ports for green derivatives," Maheshwari told Platts, part of S&P Global Energy, on Oct. 3. "We have completed feasibility studies and pre-front-end engineering and design for both our projects."

Maheshwari, who was a speaker at the recently held World Hydrogen India summit organized by Energy in New Delhi, said the company is also in advanced negotiations for partnerships on electrolyzer supply and ammonia licensing.

Welspun has signed memoranda of understanding with European and Asia-Pacific counterparts and is negotiating binding agreements, Maheshwari said. He added that interest is strong due to India's strategic location and its expanding renewable energy base.

"We are structuring long-term supply agreements that provide revenue visibility, while also exploring participation in global shipping corridors," Maheshwari said. "Over the next 18-24 months, our priority is to move these projects from the MOU stage to physical groundbreaking."

He said the company is seeking to finalize partnerships across the value chain, from electrolyzer manufacturers to ammonia licensors, infrastructure companies, and industrial customers, to de-risk execution.

State-run Deendayal Port Authority is positioning Kandla port as a strategic renewable methanol bunkering hub to fuel vessels operating on the Singapore-Rotterdam corridor, as shippers prepare for strict EU emissions regulations, Sushil Kumar Singh, chairman of the port authority, told Platts on Sept. 26.

Eye on prices

Welspun anticipates that the cost of producing renewable fuels in India could decrease further, beyond the levels disclosed in renewable ammonia and renewable hydrogen auctions in July and August.

Maheshwari said, stating his outlook, that the current crude oil refinery tender prices for renewable hydrogen are between $3.5/kg and 4/kg, and for a utility-scale project in a special economic zone/export-oriented unit, the levelized cost of hydrogen, or LCOH, is expected to be $2.5-3/kg.

"With improvements in solar module efficiency, falling battery prices and advances in electrolyzer performance, we expect LCOH to fall below $2/kg by 2030," he said.

Platts assessed Oman hydrogen produced via alkaline electrolysis, including capital expenditures, at $4.96/kg on Oct. 3, unchanged from a month earlier.

Platts assessed Japan hydrogen produced via alkaline electrolysis, including capex, at $5.36/kg on Oct. 3, down 18.4% from a month earlier.

"The conclusion of the first green ammonia auction is welcome news not only for India but also globally," Maheshwari said. "It sends a strong message about the cost competitiveness, preparedness, and pace at which India can deliver green molecules."

India's domestic renewable ammonia auctions over July-August concluded at a weighted average price of about $604/mt, establishing a new price point for global trade and potentially encouraging faster adoption of the clean fuel. However, regulatory differences could fragment the market.

Slowing momentum

Maheshwari said global momentum for renewable hydrogen has slowed, primarily due to cost pressures and evolving policies. However, the structural drivers -- industrial decarbonization, energy security and net-zero commitments -- remain strong.

"By 2030, I foresee hydrogen and ammonia moving from pilot projects to mainstream adoption in hard-to-abate sectors such as fertilizer, refining, shipping and road transportation," he said.

"The pace may be uneven, but by the end of the decade, hydrogen will be mainstream ... and poised for accelerated ramp-up."

The global low-carbon hydrogen sector is set for significant growth through 2030, despite some recent project cancellations and ongoing cost challenges, according to the International Energy Agency.

Maheshwari said Indian projects could be bright spots, but advancing to execution will require overcoming key challenges in financing, technology and infrastructure.

He noted that renewable ammonia projects are still considered high-risk because 10-year offtake agreements complicate loan tenures and pricing beyond the contract period.

Meanwhile, electricity remains the largest operating expense, and the actual performance of electrolyzers under variable renewable energy supply is still uncertain.

Additional investments are required to develop refrigerated supply chains for sea transportation and pressurized logistics for road transport, both of which are essential to support renewable hydrogen infrastructure.

"These challenges can be overcome by securing long-term offtake agreements -- domestic and international -- adopting blended financing models such as sovereign guarantees, viability gap funding, and forming strategic partnerships for technology and supply chain development," Maheshwari said.