When Indian energy company Greenko signed a memorandum of understanding with German energy company Uniper in February for green ammonia supply, it was hailed as the “first of its kind” by English-language newspaper the Economic Times.

Eight months later, Greenko’s founders announced that its new company AM Green will develop the green ammonia platform in partnership with Malaysian company Petronas’s clean energy arm Gentari and Singapore’s sovereign wealth fund GIC. The platform will serve both the domestic market and offtakers, including Uniper. Ammonia is produced from nitrogen and hydrogen and is used in fertiliser production, as well as being a means to transport hydrogen.

Putting India on the map

“India is now pivoting to exporting green energy,” says Mahesh Kolli, president of Greenko and founder of newly launched AM Green. “It was never assumed that India would be building projects at this scale. It was thought to be happening in Australia, the Middle East or the US.” 

By 2030, the platform aims to produce 5 million tonnes of green ammonia annually, the equivalent of a million tonnes of green hydrogen. fDi understands the total capex of this project to be roughly $6bn. Petronas has invested $1.6bn, according to a report by the Financial Times. The stakeholders are investing in the Indian regions of Andhra Pradesh, Tamil Nadu, Gujarat, Karnataka and Himachal Pradesh.

The inputs for the project will be 5 gigawatts (GW) from combined solar and wind, alongside 1GW of pumped hydro storage. The latter will store the energy produced before it is fed into the electrolysers. 

Reflecting on the deal’s set-up, Mr Kolli says that it spans renewables capacity, energy storage and the manufacturing of electrolysers. AM Green has another division that is building 2GW per annum-worth of electrolysers in partnership with Belgium-based engineering company John Cockerill.

“The uniqueness of what we’re doing is the ability to create a continuous energy flow which can feed the hydrogen process, and the ammonia process thereafter. In this way we can match the typical gas-based ammonia process,” Mr Kolli says.

At present, India consumes 5 million tonnes of grey hydrogen (produced using natural gas), which is used as a feedstock for petroleum refining and fertiliser production via ammonia. Last year, the Indian government laid out plans for the annual production of 5 million tonnes of green hydrogen by 2030.

Mr Kolli remarks that thanks to India’s national electricity grid, the costs of green hydrogen production can be kept lower than in other markets. Over the past 10 years, the Indian government has been on a mission to build one of the world’s biggest single electricity grids. It is this grid integration coupled with building energy storage that allows the platform to produce hydrogen competitively, according to Mr Kolli.

Unlike under the Inflation Reduction Act in the US, where the cost of hydrogen is subsidised to $3 per kg, Mr Kolli says that AM Green and partners can produce hydrogen at the same price without any subsidy.

Strategic molecule

Ammonia is becoming “a strategic molecule”, which has many use cases across many countries, according to Mr Kolli. 

The platform has signed offtake agreements with countries such as Germany, Japan, South Korea and Singapore. Each of these countries are looking to use ammonia in different ways but most of them are planning on converting it back to hydrogen. Converting hydrogen to ammonia is one way of transporting the element. 

Roughly 60% of AM Green’s green ammonia production will be used for its “hydrogen value”, Mr Kolli says, as opposed to its use cases as
pure ammonia.

But what about more foreign direct investment in this area? “Following what we’ve announced, there’s an opportunity for 10 times more than that to happen in India, due to the domestic need for green energy both in terms of power or molecules, and there’s an opportunity to make it a global export hub,” says Mr Kolli.

EY’s Renewable Energy Country Attractiveness Index report this year highlighted India as one to watch. “As the market increases its support for renewables, storage and green hydrogen, it is making significant progress on decarbonisation and is a fast-growing market on which to keep a close eye,” the report states.

This article first appeared in the December 2023/January 2024 print edition of fDi Intelligence

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