L&T, India’s biggest engineering and construction company, has tied up with HydrogenPro of Norway for setting up “GW-scale manufacturing” of alkaline water electrolysers in India. The MoU, signed today, says the two companies will “jointly work towards the setting up of a joint venture”.
A press release issued by L&T today says that HydrogenPro was founded in 2013 by individuals with background from the electrolysis industry, which was established in Telemark, Norway by Norsk Hydro in 1927. We are an experienced engineering team of leading industry experts, drawing upon unparalleled experience and expertise in the hydrogen and renewable energy industry.
“Our core product is the alkaline high-pressure electrolyser. With the new electrode technology, they are able to increase the efficiency of each unit by 14% to reach 93% of the theoretical maximum. This is a significant step forward as the cost of electric power, depending on market prices, amounts to 70-90% of the cost of producing hydrogen, the value of such increased efficiency equals approximately the investment cost for the entire plant in a Total Cost of Operation perspective. The Company is targeting a production cost for green hydrogen of USD 1.2 per kg in 2022,” the release says.
Comment
As mentioned in this blog earlier, the alkaline technology is an old one, which is on the way out. The in-market technologies are PEM and SOEC, while the upcoming one is AEM. So then why did L&T opt for an old technology?
The answer perhaps lies in the fact that electrolyser manufacturers around the world are extremely busy today. They have little time for a market like India, which requires enormous amount of patience. And, any electrolyser company that wishes to have a foot in the Indian market will come in by itself, and wouldn’t need a local partner. Thus, it is a matter of conjecture that only such companies who have a technology that doesn’t sell anywhere else would come to India, via a local partner.
It is not that L&T is naïve not to know this; only it doesn’t have a choice. This MoU does seem to show some desparateness on the part of L&T, whose boilers and turbines business (with Mitsubishi Heavy Industries) has only a fading future.
The press release gives no further information—perhaps there is nothing more to say. However, the two contact email addresses “for more information” are both of HydrogenPro and not one from L&T. This is rather odd and perhaps indicates that L&T has yet to make up its mind about electrolysers, but HydrogenPro wanted to publicize the MoU.
In October last year, L&T had said that it was studying the feasibility of getting into the manufacture of electrolysers. Subsequently, it tied-up with ReNew Power, India’s largest renewable energy company, under which the two would “jointly develop, build, execute and operate” green hydrogen plants in India.
It does look like L&T, under some pressure to arm itself with technology, needed a know-how supplier. Hence this MoU.
It remains to be seen whether this MoU actually translates into a manufacturing joint venture. It would be a surprise if it did.
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