In a bid to cement its presence in clean energy, Larsen & Toubro (L&T) plans to invest up to $2.5 billion in its green portfolio in the next 3-4 years and supply components to offshore wind farms.
Subramanian Sarma, senior executive vice-president (energy) at L&T, said the world was moving towards green energy and it was only natural that the company take a leadership position in this space. “We plan to invest up to $2-2.5 billion to start with, over the next 3-4 years, depending on how the markets evolve. This would be across green hydrogen, solar and wind projects,” he said.
The move is also in line with the engineering and construction major’s climate leadership targets under its strategic five-year plan – Lakshya 2026 – that will help reduce the greenhouse gas footprint for L&T and its clients by about 300 tonne per annum.
Also Read| L&T sets up green hydrogen plant at Hazira
Under Lakshya 2026, L&T is targeting group revenues of Rs 2.7 trillion and a return on equity (RoE) of over 18% by FY26. According to the five-year plan, the company will exit non-core businesses, develop innovative business offerings, scale up digital and e-commerce businesses, and focus on environmental, social and governance (ESG) and shareholder value creation.
In the renewables space, L&T plans to supply wind energy components to offshore companies, for which it intends to set up a separate team within the group. “This would be to manufacture and supply wind farm components such as the towers. We will not be venturing into making windmill blades, which is being done by original equipment manufacturers,” Sarma said.
At present, a team of 15-20 “very experienced” people are working on it. “We can ramp it up depending on the opportunities,” he added.
According to Derek M Shah, head of green manufacturing and development at L&T, the company is also planning to manufacture and supply critical components for green hydrogen plants. “We are looking at manufacturing of components such as electrolysers, storage batteries and fuel cells. The opportunities for green energy, not only in India, but across the world are rising,” Shah added.
This follows the commissioning of L&T’s green hydrogen plant, with a 45 kg per day production capacity, in Hazira, Gujarat. The firm is also in talks with a dozen companies in public and private sectors, including refineries and steel and cement manufacturers, to set up green hydrogen facilities for them.
“We expect to sign some deals in the next few months,” Sarma said.
In April this year, Indian Oil Corporation, L&T and ReNew Power signed a joint venture agreement to develop the nascent green hydrogen sector in India. Additionally, IndianOil and L&T also entered into a JV with equity participation to manufacture and sell electrolysers used in the production of green hydrogen.
On the ESG front, L&T intends to achieve water and carbon neutrality by 2035 and 2040, respectively.
(Travel for this story was sponsored by L&T)
