New Delhi

Oil India Ltd. (OIL) will set up a wholly-owned subsidiary—OIL Green Energy—that will manage all its green and alternative energy businesses for which the State-run company plans to invest ₹25,000 crore by 2040.

The company is targeting non-fossil fuel energy to account for 5-7 per cent of its total energy portfolio by 2030, which will be further enhanced to 12-15 per cent by 2040.

The findings form part of the 21st report by the Committee on Public Undertakings, which was placed in Parliament last week. The replies of the Ministry of Petroleum and Natural Gas (MoPNG) were received by the panel on October 14, 2024.

Diversification plans

The Ministry informed that the Maharatna company started diversifying into low carbon and green energy space “organically” since 2012.

“OIL is now planning to diversify into green and alternate energy businesses not just for captive consumption, but to emerge as a well-diversified integrated energy player. To address the above, OIL has formulated a strategy to dedicatedly focus on green and alternate energy business and has accordingly decided to form a wholly owned subsidiary (WoS), OIL Green Energy, to manage the green and alternate energy business,” it added.

As per the adopted strategy, OIL plans to have a 5-7 per cent non-fossil energy in its total energy portfolio by 2030 and 12-15 per cent of non-fossil energy by 2040. It is having a target to achieve the green and alternate energy capacity of 3.5-4 million tonnes of oil equivalent (MTOE) by 2040, the panel added.

The WoS would cover biofuels, green hydrogen, renewable energy, carbon capture utilisation and storage (CCUS), methanol and geothermal and other opportunities directly or indirectly supporting decarbonisation and energy transition, MoPNG said in its response.

The market attractiveness and strategic fit for each of the above energy domains has been assessed and recommended along with the detailed strategy formulation exercise taking into consideration various parameters like , industry overview, key success factors, cost and return and market share, etc., the Ministry added.

So far, OIL has an installed renewable energy capacity of 188.1 megawatt (MW), which includes 174.1 MW of wind and 14 MW of solar power projects spread across Rajasthan, Madhya Pradesh, Gujarat, Assam, etc.

These projects entailed an investment of ₹1,230.73 crore and the total revenue generated from RE projects till FY22 was ₹870 crore.

Besides, it is also setting up India’s first Anion Exchange Membrane (AEM) technology-based green hydrogen plant (100 kilowatt) at its Jorhat facility in Assam.

First FCEV bus

OIL is also supporting the development of India’s first 9-metre Hydrogen Fuel Cell Electric Vehicle (FCEV) bus through its start-up programme, SNEH. This zero-emission bus, powered by a 60 KW PEM fuel cell engine, was flagged off by Prime Minister Narendra Modi at the India Energy Week 2023.

The CPSU is also undertaking a project to establish 25 compressed biogas (CBG) plants across India.

In its annual report for FY24, OIL said, “The company is envisaging to invest ₹25,000 crore by 2040 for the development of alternate energy through a wholly owned subsidiary company dedicated to manage alternate energy business of OIL.”