Electrolyzer manufacturer Greenzo Energy has signed a Memorandum of Understanding (MoU) with RBM Infracon to supply electrolyzers with a total capacity of 15 MW. These electrolyzers will be deployed across Jamnagar, Kutch, and Bhuj in Gujarat, involving an investment of ₹200 crore.

Greenzo Energy is currently India's sole indigenous alkaline electrolyzer manufacturer, while RBM Infracon is a company involved in engineering, procurement, and construction services. This partnership aims to contribute to India’s green hydrogen goals by producing green hydrogen from these facilities, which will be supplied to small-scale enterprises engaged in sectors like steel manufacturing, refineries, and petrochemicals.

"We are discussing with small and medium-scale enterprises in Gujarat to supply green hydrogen. However, no concrete offtake agreement has been signed so far," said Jay Bajrang Mani, Managing Director of RBM Infracon. He emphasized the strategic placement of these facilities near refineries to ensure efficient supply of green hydrogen.

Sandeep Agarwal, Managing Director of Greenzo Energy, added that the company's electrolyzers are fully indigenously manufactured and customized for India’s climatic conditions. Greenzo's alkaline electrolyzers are designed to deliver hydrogen at 30 bar pressure, eliminating the need for additional compressors.

Expanding Greenzo’s Unlisted Share Market Reach

With this order, Greenzo Energy’s order book now stands at ₹1,400 crore, with ₹1,000 crore expected to be realized in the financial year 2025-26. This growth in orders reflects India's expanding renewable energy landscape and Greenzo’s leadership role in the green hydrogen market.

Apart from its agreement with RBM Infracon, Greenzo Energy has secured contracts with Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for a super-critical thermal power plant. The company has also received orders from the Government of Oman and a prominent public sector company in Nepal.

Understanding Green Hydrogen

Green hydrogen is produced using renewable energy sources, such as wind and solar power, to split water into hydrogen and oxygen through a process called electrolysis. It is considered a key component in reducing greenhouse gas emissions, as it provides a cleaner alternative to conventional hydrogen, which is often derived from fossil fuels.

The potential applications of green hydrogen are vast, ranging from fuel cells in electric vehicles to power generation, and as a feedstock for various industries. Its production is carbon-free, making it an attractive solution for countries committed to reducing their carbon footprints.

Green Hydrogen in India: A Nascent Sector

The green hydrogen industry in India is still in its nascent stage, largely because of the high costs associated with production and the lack of infrastructure for distribution and utilization. As of now, the green hydrogen sector in India is primarily focused on creating initial pilot projects and establishing electrolyzer manufacturing facilities.

India's green hydrogen initiatives are gradually gaining traction, with government policies like the National Hydrogen Mission aiming to encourage both public and private sectors to invest in this emerging industry. The goal is to make India a hub for green hydrogen production by leveraging the country's renewable energy capacity.

Industrial Applications First: The Path to Adoption

Currently, the primary consumers of green hydrogen in India are expected to be heavy industries, such as:

1. Steel Manufacturing: Green hydrogen can serve as an alternative to coal in the steelmaking process, making it an attractive option for industries looking to decarbonize.
   
   
2. Petrochemical Refineries: Refineries can use green hydrogen to process crude oil, further reducing the carbon footprint of their operations.
   
   
3. Fertilizer Production: Green hydrogen can replace conventional hydrogen in the production of ammonia, which is a critical input for fertilizers.

These sectors have high energy demands and significant emissions, making them ideal candidates for adopting green hydrogen to transition towards a sustainable and low-carbon energy source.

Challenges to Overcome

While the potential for green hydrogen in India is immense, several challenges need to be addressed:

• High Cost of Electrolyzers: The production cost of green hydrogen is significantly influenced by the price of electrolyzers, which are still relatively expensive due to limited manufacturing.
  
  
• Infrastructure and Distribution: The infrastructure needed for the large-scale distribution of hydrogen, such as pipelines and refueling stations, is currently inadequate. This makes scalability a concern.
  
  
• Government Policies and Incentives: Supportive policies, subsidies, and incentives are essential to bridge the cost gap between green hydrogen and other energy sources.

Unlisted Shares of GreenZo Available for Investment

GreenZo's unlisted shares are currently available at INR 675 per share, translating to a market cap of approximately INR 800 crore. Notably, the last private placement round was completed at INR 418 per share in May 2024.

According to GreenZo's valuation report, the company projects revenue of INR 255 crore and a PAT of INR 42 crore for FY 2024-25. If these targets are met, the current P/E ratio would be around 20x. However, we will need to wait for the next 6 months to see if these numbers materialize and validate the projected growth.

Conclusion

The partnership between Greenzo Energy and RBM Infracon is a promising step forward in establishing a viable green hydrogen economy in India. By supplying electrolyzers with a total capacity of 15 MW to facilities across Gujarat, this deal marks an important milestone in India's quest for renewable energy solutions and paves the way for the larger adoption of green hydrogen in heavy industries.

India’s green hydrogen industry is at the beginning of an exciting journey, with a vision to become a major global player in renewable energy. However, to achieve this, there is a need for collaborative efforts between the government, private sector, and investors to overcome the existing challenges and make green hydrogen a cost-effective and practical energy solution.