Adani ties up with Total Energies for green hydrogen

Total Energies joins Adani for Green Hydrogen

by 5paisa Research Team Last Updated: Dec 16, 2022 - 11:47 am 25.3k Views
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The Adani group, which had first signed a joint venture agreement with Total SA of France in the year 2018, now plans to expand the realm of their collaboration into green hydrogen. In India, both the Reliance group and the Adani group are extremely bullish on the green hydrogen segment.

Incidentally, hydrogen is made from water through the process of electrolysis to separate hydrogen and oxygen. When renewable sources of green energy are used to produce hydrogen, it is popularly known as green hydrogen.

In the latest announcement made by the Adani group via a press release, Adani New Industries (ANIL) and TotalEnergies (a joint venture with Total SA) will look to a massive investment of $50 bn into green hydrogen.

ANIL and TotalEnergies of France have finalized plans to create the world’s largest green hydrogen ecosystem in the Kutch region of the state of Gujarat. This is likely to define the future of energy and Adani plans to play a very big and significant role in being an integral and indispensable part of the new energy order.

Here is how the deal will actually be structured. As part of the strategic collaboration, TotalEnergies will acquire a 25% stake in Adani New Industries Ltd. (ANIL), which happens to be a subsidiary of Adani Enterprises Ltd. Adani Enterprises is the holding company cum incubation unit of the Adani group and most of the new age businesses are housed under the aegis of Adani Enterprises. 

The joint venture TotalEnergies will invest the sum of $50 billion over the next 10 years in setting up the green hydrogen ecosystem. Gautam Adani, the chairperson of the Adani group, has expressed confidence that the joint venture would be able to leverage the group’s ability to produce the world’s least expensive electron and that would logically lead to producing the world’s least expensive Green hydrogen. Even the Reliance group has lined up investments of $10 billion for green hydrogen.

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It must be remembered that it is not just a collaboration of like minded enterprises but also a collaboration between two businesses that are virtual pioneers in energy transition and clean energy adoption. The group also expects that the collaboration would be instrumental in strengthening the public ESG commitments made by both companies.

To begin with, ANIL will develop green hydrogen production capacity of 1 million ton per annum (MTPA) before the year 2030 at Mundra in Kutch, where it already has a robust presence.

The way ANIL looks at energy is as an integrated play on the future of energy. It aims to be the largest fully integrated green hydrogen player in the world. To de-risk its business model and also manage the cost relationships better, ANIL is planning to establish a presence across the entire value chain. ANIL will be involved in manufacturing renewables and green hydrogen equipment (solar panels, wind turbines, electrolysers). It will also undertake large scale generation of green hydrogen as well as produce green hydrogen derivatives.

For TotalEnergies, this gives them a low cost and efficient method to tap the ever increasing opportunity in addressing the needs of the European businesses to decarbonise the hydrogen used in European refineries by 2030. In addition, the collaboration will also enable them to mass produce green hydrogen to meet demand an explosion in demand. For the Adani group, this is an easy access to the high value and highly lucrative European markets. It surely looks like a collaboration of equals to begin with. Green is the road ahead.


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