Hero Future Energies plans to push ₹4,000 crore green hydrogen, says Chairman Munjal

New Delhi: KKR-backed Hero Future Energies (HFE) is set to invest ₹Founder and chairman Rahul Munjal said in an interview that the Rs 4,000 crore in green hydrogen projects is betting on growing demand from industries such as steel, cement and refining, which are under pressure to reduce emissions. The renewable energy company is looking for an early position 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 into FY30, with an increasing focus on hybrid, storage and continuous renewable energy projects, along with 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-reduce sectors,” Munjal told Mint. “In India, HFE is currently evaluating a 50 MW electrolyser and 250 MW hybrid RE of upcoming capacity, with an estimated investment of ₹4000 crores.”

Specific details of the project will be announced “as they mature,” he added.

Read also | Hero Future Energies launches green hydrogen plant for blending with PNG, LPG

On evolving energy transition technologies and the potential of green hydrogen emerging as a major energy commodity, the HFE chairman said that in about four years, green hydrogen as a commodity and related technology and economics may mature and the company – with its experience from ongoing projects, including a facility at Rockman Industries in Tirupati, Andhra Pradesh – may be better positioned to further develop this space and invest heavily in green hydrogen.

“In the next three, four years, green hydrogen will become the mainstay. And when that happens, we would have enough experience with this project and some of the other projects that we’re doing to be able to do big projects and make it a real business,” he said. “The idea is to get there early, do the projects, understand the industry, so by the time the industry is ready for us, we know what we’re talking about.”

Produced using renewable electricity, green hydrogen is emerging as a cleaner alternative to fossil fuels in hard-to-reduce industries such as steel and cement, and can replace gray hydrogen in refineries and fertilizer plants.

Munjal said his company is currently working on two to three green hydrogen projects, including one with the Indian Institute of Technology.

In March last year, Andhra Pradesh Chief Minister N. Chandrababu Naidu inaugurated the Tirupati green hydrogen HFE project at Rockman Industries.

Read also | Hero Future Energies launches green hydrogen plant for blending with PNG, LPG

HFE’s global portfolio currently stands at 7.7 GWp (gigawatt peak) of renewable energy assets and 2.9 GWh (gigawatt hour) of battery energy storage capacity in India, Ukraine, Vietnam and the UK, including operational and underdeveloped projects, with a significant proportion of fixed and dispatchable renewable energy (FDRE) projects.

“The pipeline covers solar, wind, hybrid, RTC (uninterruptible power supply) and storage-backed solutions, reflecting our growing focus on reliable and dispatchable renewable energy. Most of our customers 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 public scale serving distribution companies and the remaining 20% is procured by commercial and industrial (C&I) consumers.

The company will also focus on future pumped storage (PSP) projects as demand for uninterruptible and on-demand power grows with increasing concerns about grid stability due to the increasing integration of renewable energy. These plants can absorb excess renewable energy during off-peak hours and release it when demand rises.

Read also | Abu Dhabi’s Masdar to buy minority stake in Hero Future Energies

“We’ve looked at it in the past. In the last six months or one year, there’s suddenly more interest in it. We haven’t done our homework yet, but we’re not going to shy away. If we feel it makes sense now, we’ll look at it,” the chairman said, adding that the company is not yet “actively” pursuing any such projects.

Munjal said the company’s plans to set up PSP projects have fallen by the wayside as the company has focused more on solar projects in the past few years, given the drop in solar module prices. In the future, if PSP emerges as a viable proposition, HFE can really enter this space, he said, adding that it is a robust technology for storing energy and sending electricity in non-solar hours or whenever needed. “If the numbers work, why not? It’s good to be in,” he said.

India has 122.77 GW of pipeline capacity in various stages of development. The Central Electricity Authority has a plan to install another 100 GW of this capacity by 2035-36.