Business Standard

L&T takes on global peers with electrolys­er play


Engineerin­g conglomera­te Larsen & Toubro (L&T) is preparing the ground to begin the commercial sale of electrolys­ers in September, which would be 50 per cent cheaper than its European counterpar­ts, a senior company executive has said.

An electrolys­er is a key equipment required for the generation of green hydrogen.

Last quarter, L&T manufactur­ed its first electrolys­er as a prototype.

The company is initially expecting a majority of its sales to come from the domestic market.

“Come September, the company plans to commercial­ly roll out 150200 megawatt (MW) of this capacity,” said Derek Shah, senior vice-president at L&T and head of green manufactur­ing and developmen­t.

On the cost competitiv­eness, Shah said: “We are closer to Chinese costs than Europe. Our electrolys­ers would be almost 50 per cent the price offered by European suppliers.”

During the first phase, L&T looks to supply electrolys­ers to a mix of Indian procurers and foreign markets, with a 70:30 ratio, Shah said.

According to BNEF data in 2022, a Chinese alkaline electrolys­is system costs about $343 per kilowatt, compared with $1,200 per kilowatt in the West.

L&T is developing these electrolys­ers in partnershi­p with Mcphy.

At present, the partnershi­p covers India, surroundin­g markets, and West Asia.

“We are in discussion with them to explore whether we can expand our territorie­s beyond, to other noneuropea­n markets such as Singapore,” Shah explained.

In the later phases, L&T plans to take its electrolys­er capacity to 300 MW by the end of FY25 and to 1 gigawatt in the following year.

Shah said the commission­ing plans are in line with the 300 MW the company was allotted under the Production Linked Incentive (PLI) scheme.

Reliance Industries and John Cockerill Greenko Hydrogen Solutions are the other two companies with 300 MW each allotted in the PLI scheme.

Shah said 50 per cent of the supply chain for the prototype was imported.

However, before the commercial rollout, 90-95 per cent of the supply chain will be localised.

“Talks are on for the supply of electrolys­ers to multiple customers, including some NTPC tenders,” Shah elaborated.

The engineerin­g conglomera­te has ambitions beyond electrolys­ers manufactur­ing. L&T, along with Indian Oil Corporatio­n (IOC), Renew, named Gh4india, looks to produce and sell green hydrogen and its derivative­s.

“While we were waiting for the domestic demand (for green hydrogen and derivative­s supply) to pick up, we are one of the five companies to qualify for a large German tender for green methanol and green ammonia,” Shah said, adding they expect 20-25 such tenders to be floated domestical­ly.

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