Avaada proposes Rs 40,000 crore green ammonia plant in Rajasthan; may offer 3,500 jobs

In a noteworthy development for the country’s fledgling green hydrogen and ammonia industries, integrated energy enterprise Avaada Group has proposed a Rs 40,000 crore investment for a green ammonia manufacturing unit and a renewable energy power plant in Rajasthan.

The Noida-headquartered company has signed a memorandum of understanding (MoU) with the Department of Industries and Commerce of Rajasthan.

The plant which is proposed to be built in the Rajasthan's Kota district is expected to directly employ 3,500 people.  

Green ammonia is made with hydrogen produced by electrolysing water using electricity generated through renewable energy sources.

Emphasising the country’s energy transition as a vital step towards self-reliance a company statement quoted group chairperson Vineet Mittal as saying that Avaada was committed to making India energy independent through green energy.

“For industries that require high-temperature heat, such as foundries and glass and steelmakers, this [green hydrogen] could be ground-breaking as it will not only replace fossil fuels with renewable sources but also produce green ammonia and a substitute for gas,” said Mittal.

Reduce production cost

The first phase of India’s green hydrogen policy notified in February is aimed at facilitating the production of 5 million tonnes of green hydrogen by 2030. The policy also envisages the country achieve carbon neutrality by reducing CO2 emissions and creating a robust hydrogen production ecosystem.

Industry experts are, however, of the view that the production cost of green hydrogen and green ammonia won’t reduce till the much-awaited production-linked incentive (PLI) scheme for units, electrolysers, fuel cells, etc., gets rolled out.

Currently, the cost of manufacturing green hydrogen works out to nearly $6 a kilo, which makes it unviable for any commercial application. This needs to be brought down by more than 50 per cent to $2-3 kilo for it to be able to compete with manufacturing hydrogen using gas cracking. It is in this context that industrial-scale projects like the one announced by Avaada assume significance.

In June, Adani Group partnered with France’s TotalEnergies to create what it claims would be the world’s largest green hydrogen ecosystem. Similarly, Mukesh Ambani-led Reliance Industries Ltd (RIL) is planning to lower the cost of hydrogen to $1 per kilo in the next ten years by investing in an integrated mega-production facility comprising solar panels, green energy, electrolysers and fuel cells.