After selling non-core assets in the past, engineering and construction company Larsen & Toubro (L&T) is focusing on areas such as hydrocarbon, renewable energy and power transmission in the energy sector. Subramanian Sarma, deputy managing director and president, energy, talks to Raghavendra Kamath about opportunities in the sector and shares his outlook. Excerpts:
West Asia is seeing a lot of renewable energy projects. Which segments are offering you the highest opportunities?
West Asia is undergoing a major transformation in its energy landscape. Several countries in the region are actively investing in renewables as part of their broader economic diversification and sustainability goals. The solar potential here is immense, and governments are moving decisively to capitalise on it through large-scale photovoltaic and concentrated solar power (CSP) projects. Beyond solar, hybrid renewable systems and grid-scale energy storage are fast emerging as critical enablers of reliable clean power. Pumped storage and battery storage technologies, in particular, are gaining prominence as countries seek to balance grid stability with intermittent renewable generation. The region is also making meaningful strides in green hydrogen, a segment still nascent but with significant long-term promise, given West Asia’s abundant solar resources and export ambitions.
What are the key opportunities you are seeing in India’s renewable energy basket?
Beyond traditional solar and wind, we are seeing strong traction in hybrid and round-the-clock renewable projects that combine generation with storage. The storage space itself is opening up rapidly, whether it is battery-based systems or pumped storage projects, both are critical for enabling stable, dispatchable renewable power. These integrated models are becoming the cornerstone of India’s next phase of energy expansion. We also believe that offshore wind opportunities will soon begin to manifest, and that space is well aligned with our capabilities. Floating solar and agri-solar projects are also areas of growing interest, and we already have a presence in these segments. Renewable energy today is not limited to power generation alone, it extends into green hydrogen and green ammonia, which we expect will see accelerated adoption in the coming years. We are closely watching this space, as it has the potential to become a major driver of clean industrial growth. The next phase of renewable growth will, therefore, hinge on integration and innovation combining generation, storage, and digital intelligence to create resilient and future-ready energy systems.
What is your outlook on hydrocarbon orders in the near term?
We are currently seeing a selective yet steady pipeline of investments in gas exploration and production, refining, petrochemicals, LNG infrastructure and cross-country gas pipeline projects. Gas exploration and production is expected to play an important bridging role in the transition journey. At the same time, the industry is witnessing a shift towards decarbonisation through carbon capture tech, electrification of processes and greater operational efficiency. Many operators are also integrating carbon capture, utilisation, and storage (CCUS) solutions into new and existing assets. The near-term outlook, therefore, remains constructive, characterised by sustained activity in traditional segments. The real opportunity lies in responsibly managing the balance between conventional hydrocarbons and the evolving clean energy ecosystem.
How do you look at the boom in data centres and semiconductors in India and overseas? Do they offer good opportunities to L&T?
The data centre and semiconductor sectors are witnessing extraordinary momentum. In India, given our strong democratic foundation, large market size and government-backed initiatives like the semiconductor mission and data localisation policies, we are poised to see significant, sustained growth. Similar trends are unfolding globally, especially across the US, Western Europe, and China, where technology adoption and manufacturing capacity are accelerating at an even faster pace. This convergence of tech and infra is defining the future. For a technology-driven engineering organisation like L&T, these are natural extensions of our core strengths. Our experience in delivering large-scale, high-reliability, and energy-efficient infrastructure positions us well to contribute meaningfully to building the digital and industrial backbone of the new economy.
Many power companies have once again started talking about adding capacities in thermal power. How do you look at it?
The renewed interest in thermal should not be seen as a step backward, but as an evolution toward cleaner, smarter, and more efficient energy generation. The emphasis today is on deploying advanced supercritical and ultra-supercritical technologies that significantly improve efficiency and reduce emissions. Moreover, there is growing focus on modernisation and repowering of existing assets to align with stricter environmental norms. In essence, thermal power will continue to play a balancing and enabling role in India’s energy transition ensuring grid stability while the share of renewables steadily rises.
Capacity additions in renewables are lagging on our way to meet the renewable energy target of 500 GW by 2030. What are the key impediments and challenges?
I take a somewhat different view on this. I believe India has, in fact, made commendable progress in advancing its renewable energy agenda. This is not just a personal observation, many global industry leaders share the sentiment. India’s push towards renewable energy has been strong and determined. Having said that, yes, there is always a scope to do more. There are, however, valid reasons why progress has not been even faster. First, most renewable projects demand large tracts of land, and land acquisition continues to be complex and time-consuming. Second, the areas are best suited for solar or wind generation with high resource potential and available land often lack adequate evacuation infra. Establishing transmission networks in such regions requires significant investment and long lead times. Third, the input costs for key components, such as solar modules, have been volatile over the past few years due to supply chain disruptions. Many of these issues are now being addressed. Domestic manufacturing capacities are expanding, and the national grid and evacuation infrastructure are being strengthened. With these enablers coming into place, I am confident that India will regain momentum and remain firmly on course toward achieving its 2030 renewable energy vision.
How do you look at opportunities in battery storage systems? What kind of work are you doing in this segment?
Battery Energy Storage Systems (BESS) are just around the corner from a major inflection point poised to gain significant momentum in the energy transition. They represent the critical bridge to achieving true round-the-clock renewable energy by addressing the intermittency challenge and ensuring continuous, reliable, and competitive power delivery. At L&T, we are actively building strong engineering, procurement, and system integration capabilities in this segment, supported by global technology partnerships and execution excellence. Our focus remains on developing scalable, safe, and high-performance storage systems that not only strengthen grid resilience but also enable 24×7 renewable energy, a vital step towards a sustainable, digitally powered future.