Hero Future Energies Bets Big On Green Hydrogen

Q. With India targeting to achieve net zero by 2070, what sort of an opportunity do you see in the Indian renewable energy market?

A. The biggest driver of the industry globally, and in India, the biggest driver of the industry globally is the world is now committed to a net zero. The three biggest polluters today are electricity, mobility, and industry. So for electricity, today we have renewables, we have wind, we have solar. There is enough of what we know today to help us decarbonize the electric grid. But it comes with its own challenges, because wind and solar as you know, both are intermittent. So both will come when they come and when they don’t come we need storage. Storage comes from battery storage, or it comes from hydrogen. So there are two parts, either we invest in batteries which we are doing across the world, or we invest in hydrogen. Today’s technologies are good enough to go for another decade or so. But if I think about a grid for the world, especially for India, where majority of our energy would come from renewables the grid as we know it today, will have to completely go through an overhaul.

So when it goes through an overall we will need a lot of storage, especially we will need to rely on wind and solar, and then we’ll also need nuclear. So next is mobility. Mobility you’ve seen the world is moving towards EVs. I think eventually the world will move away from ICE engines to hybrid to electric. I think what we see in electric cars today, everybody thinks the world is electric. The world is going EV. But mind you, EV also has a problem because we still as a world don’t know how are we going to recycle the batteries. And recycling of batteries are becoming a major issue. The overall solution for mobility is also hydrogen. Electric vehicles are basically what takes us out of combustion engine but takes us towards hydrogen.

In terms of industrial use, today, if you wanted to green cement, green paint, green glass, the only thing that can replace gas is hydrogen. So if you see if you connect the dots, all roads lead to hydrogen. Fast forward from now to 2050. You see a lot of dependence on oil and gas and fossil fuels gets replaced by hydrogen. So when you ask what is our hero future entities plan for hydrogen, you know if you want to be in the industry for a long term long run, without hydrogen, we will not be able to do renewable energy without hydrogen we will not be able to do anything in mobility without hydrogen we will not be able to do help the C&I sector which also wants to go to net zero. So hydrogen becomes a very, very important play. Fortunately, the world understands it, India understands it.

Q. What are your plans for investment in green hydrogen in India?

A. SECI is coming out a tender, where they are aggregating demand and is going to be first of many such tenders, which will come eventually. So, one of the businesses that we are looking at is to be a hydrogen supplier for projects such as SECI’s. The second hydrogen use that we are looking at is to help industries decarbonize, replace their oil and gas or fossil fuels with hydrogen. And the third is to use hydrogen for storage of electricity in renewables. So, we have have several different projects, but there are three different categories typically, that hydrogen businesses come under.

And today, we are looking at all three. For these three, we have certain tie-ups which are already in place. We are in talks with some key states in the country. Whatever we are doing is mainly focused in India for hydrogen.

Q. In terms of energy storage, which are the sectors you are looking at?

A. It has to be both, batter and pump, because depending on the tender, and depending on the size and depending on the location, price and the duration, you want to store energy for. You know, one is always better than the other. And it’s very difficult to say which will win when, so we will have to play in both technologies going forward.

Q. We have witnessed regulatory issues in solar, although the policy for green hydrogen has been launches, there is no policy for battery storage. How do you see the regulatory framework there?

A. Talking about hydrogen, the whole world is still learning hydrogen, so it’s the right time, we invest money in creating a hydrogen infrastructure, and to end in India itself. So we don’t have to depend on other countries or the supply chain. But for solar, we are now playing catch up. So that’s why we are putting on ALMM or we are putting other non-tariff barriers, but what those barriers is doing is hurting the industry itself, because the the amount of demand for solar panels in India is far greater than the supply from Indian manufacturers.

Now, it is the same thing in battery storage. So, it’s a very tricky situation where the government finds itself in. On the one hand, one understands and sympathizes with them (the government) when they need to create an Indian supply chain, but at the second hand, how long do you wait to create that supply chain. If you start penalizing people who are going to import the lowest cost material, then you’re never going to create an efficient industry which is homegrown.

So, you know, I think the minister has to walk a very tight rope here. It’s a difficult decision to make, whenever a country wants all the manufacturing to be in India, but at the same time, you don’t create competition until you don’t create market forces, then are you really creating that market.

Further, you won’t have an industry in India for lithium ion, till you don’t control lithium at the end of the day, till you don’t have the entire supply chain, you will get caught somewhere or the other.

Q. What has been the impact on customs duty imposition on solar modules on the projects of Hero Future Energies in India?

A. The price of panels is going up. That’s what has happened because there is a lack of supply but the demand is very high. So there is a supply-demand mismatch.

If you see how the PPA pricing has behaved in the last eight to nine months you’ll see there’s an upward revision because of two reasons. One is because of inflation and the second is because of because of this.

Q. Currently, a large part of solar business is in the utility business. Do you plan to do more in the C&I space?

A. The ratio of C&I (commercial and industrial) to utility segment probably is 20:80. I think it’s an opportunity game. Like every country has an ambition to go net zero, so does every industry. And I’ll just give you a small example. If you’re a part of a supply chain of a European company, and you’re supplying auto components to a European company, or the European company wants to go net zero by 2030-2040, their supply chain needs to go net zero as well.

So there is a demand in the market is healthier, too. It’s about an opportunity. That is that the C&I is required, the need to decarbonize the supply chain.

rituraj.baruah@livemint.com