Key Takeaways
- L&T postpones its plan to expand electrolyser manufacturing capacity to 1 GW due to weak demand for green hydrogen.
- The current capacity is 400 MW, and the planned expansion was set for completion by March 2027.
- L&T is prepared to ramp up production swiftly if market conditions improve and new projects emerge.
Expansion Plans on Hold
Larsen & Toubro (L&T) has delayed its plans to boost electrolyser manufacturing capacity to 1 GW, primarily due to a lack of expected demand for green hydrogen. L&T Electrolysers Ltd (LTEL), a subsidiary of L&T Energy GreenTech Ltd, intended to invest between Rs 450-550 crore to set up the new capacity at Hazira, Gujarat, by March 2027. Currently, the company operates at a capacity of 400 MW.
According to an anonymous industry executive, the anticipated demand for green hydrogen has not materialized as expected, prompting L&T to reconsider its expansion timeline. Derek Shah, Managing Director and CEO of L&T Energy GreenTech, emphasized that their existing assembly line and robotic capacity are sufficient to meet the current domestic market demands for green hydrogen technologies.
Shah indicated optimism for future growth, expressing that L&T could quickly escalate production to reach the 1 GW target once the market conditions improve and more relevant projects are announced in the green hydrogen, green ammonia, and green methanol sectors. He stated that if all proposed projects, both domestically and aimed at exports from India, come to fruition, L&T’s facility could ramp up to the planned capacity within 12 to 18 months.
The timeline for executing green hydrogen and ammonia projects typically stretches over 30 to 40 months, Shah assured that L&T would not face challenges in adjusting the electrolyser plant’s production in line with industry demands. To date, L&T has invested ₹293 crore into the electrolyser project, which operates on pressurized alkaline technology licensed from France’s McPhy Energy.
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