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INTERVIEW: India's ACME to launch renewable hydrogen, ammonia plant in Jul-Aug

Highlights

CEO says renewable hydrogen mill gate price likely $2-3/kg

Imported 3.5 MW electrolysis plant's capacity 5 mt/day of hydrogen and/or ammonia

Oman 2,400 mt/day renewable ammonia plant ready for construction end-2021

India's ACME Solar Holding Private Limited, a 5.5 GW renewable energy company, is set to launch its first renewable hydrogen and ammonia "semi-commercial" plant in Rajasthan state by July-August, the company's top executives said in an interview July 9, adding that the facility could generate energy at well below the price levels currently heard in the nascent industry.

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The plant would have an onsite solar farm of 4-5 MW and the capacity to produce 5 mt/day of renewable hydrogen and/or ammonia and though the solar panels and the electrolysis plant are imported, it would manage to keep costs and prices down with "typically frugal engineering that India is good at," CEO Rajat Seksaria said.

The renewable hydrogen mill gate price would likely be $2-3/kg, as against wider discussed levels of $5-6/kg or even higher in the nascent global renewables business, according to the company.

ACME is also building a much larger plant of 2,400 mt/day capacity of renewable ammonia in Oman that will be "shovel ready" by December, with the first phase likely to be commissioned by end 2022 or early 2023, Seksaria added.

Manoj Kumar Upadhyay, founder and chairman of ACME, said that the Rajasthan plant would likely be the first such integrated plant in the world and the Oman plant would be among the biggest.

The Rajasthan plant, built in desert terrain, has already started producing renewable hydrogen, while the components of the ammonia plant are currently being added. A ribbon cutting is planned for end-July or early August.

"We will demonstrate the whole [plant] but will also be producing outputs which will have economic value," Seksaria said, adding that they have no long-term purchase agreements but are talking to state-run companies such as GAIL (India) Ltd and Indian Oil Corporation Ltd for selling renewable hydrogen and ammonia.

Renewable hydrogen has been dubbed the "fuel of the future" as the world transitions away from fossil fuels and several companies and governments start to build pilot plants and set up plans for establishing markets and supply chains.

Renewable hydrogen has been nicknamed "green hydrogen" and is produced by an electrolysis plant that splits water into hydrogen and oxygen. Emissions are water vapor when this fuel is used in industrial and transport sectors.

Oman venture

The Oman plant will be export-oriented, with renewable ammonia set to be shipped from Duqm port.

The Oman government has given land in a special economic zone in Duqm that has high wind and solar resources -- the solar resource is 15-20% higher than that of the Rajasthan facility -- and will be facilitating the project but there would be no subsidy from them.

"We are in discussion with various global players who want to take strategic position along with us or they want to make pure financial investment but it majority [stake] will be held by ACME," Seksaria said, adding that the expected capital expenditure would be $3 billion.

For its other established projects, ACME has reached agreement with foreign direct investing partners such as Brookfield Renewable, IFU, Scatec and a United Nation arm UNOPS.

Renewable ammonia is a "carrier" of renewable hydrogen as it is composed of nitrogen and hydrogen and is easier to transport than gas hydrogen. Renewable ammonia can be liquefied at minus 33 degrees Celsius and carried on a vessel. The importer can use it in fertilizer and chemical industries, or crack it to get the hydrogen for use elsewhere.

"As we do this energy transition towards greener fuels, the lowest hanging fruit will possibly be green ammonia, replacing conventional ammonia," Seksaria said.

In the spot market in Oman, conventional ammonia is trading at around $450/mt.

"The way we are configuring this plant, we will not be too much expensive than this," Seksaria added, hinting at the likely pricing of the renewable ammonia at the Oman plant.

Renewable energy future plans

ACME plans to have three more facilities like the Oman one by 2030, in high solar and/or wind resource zones globally, Upadhyay said.

"Once all these plans come to fruition by 2030 we will have cumulative green ammonia capacity of 3.5-4 million mt per annum, supported by 10-12 GW of downstream renewable power to generate this hydrogen and ammonia," he added.

The company has given its suggestions to the Indian government, which is working on a hydrogen policy.

"In the shorter term -- 2-5 years – the policy will target areas like fertilizer, refineries and blending with natural gas which should enable incremental demand of 20-30 GW of renewable power in the upstream," Upadhyay said.

"In the medium term -- 5-15 years -- the policy should enable demand from green hydrogen (or green ammonia) based round the clock power generation and hydrogen fuel cell based transportation should kick in which can potentially add 300 GW + of downstream renewable power capacity."