IOCL green H2 tender in legal mess, gets one bid

NEW DELHI : The tender to set up the first green hydrogen plant of state-run oil refiner and marketer Indian Oil Corp. Ltd (IOCL) received one bid till the 29 November deadline, people aware of the development said.

The bid came from GH4India Pvt. Ltd, which is IOCL’s own joint venture (JV) with infrastructure and engineering major Larsen & Toubro (L&T) and renewable energy company ReNew, the people said on the condition of anonymity. The JV, in which all three companies have equal stakes, was formed this year in August.

Meanwhile, an industry body of green hydrogen firms has approached the Delhi high court, alleging bias towards IOCL’s JV in the tender clauses.

“Around 50 players had participated in the pre-bid consultation. However, only one player submitted the bid due to the right of first refusal clause,” said another person aware of the development.

According to the people cited above, the right of first refusal clause (Clause 19 of the tender) gives IOCL preferential right to purchase excess green hydrogen generated at the green hydrogen generation unit (GHGU). In case IOCL does not confirm the purchase within 60 days, the operator can offer the gas to third-party customers. However, the price offered to them cannot be lower than what was offered to IOCL. Other terms and conditions offered, too, must be less favourable than those offered to IOCL.

“The parties would have to agree that IOCL shall be entitled to exercise its right of refusal every time the quantity of the green hydrogen generated at the GHGU increases on account of capacity augmentation or technological upgradation, modification or restructuring,” said one of the people earlier.

Queries sent to the petroleum ministry, Indian Oil, ReNew and L&T remained unanswered till press time. Industry body Independent Green Hydrogen Producers’ Association (IGHPA) could not be reached for comment.

IOCL’s tender, released on 29 August, was for a BOOT (build, own, operate, transfer) contract for a GHGU of 10 kilotonne per annum (KTA) at its existing Panipat Refinery Petrochemical Complex in Haryana. The tender was for a contract of 25 years, wherein the selected player would maintain and operate the project for the duration.

Meanwhile, IGHPA has petitioned the Delhi high court against the tender, particularly aggrieved by the right to first refusal clause. IGHPA was formed last year by six renewable energy companies —Azure Power, Acme Group, Fortum India, O2 Power, Sprng Energy and SunEdison Infrastructure.

The court has admitted the plea and, through its order dated 29 November, issued notice to the Government of India and other parties asking to file affidavits. The latest hearing in the matter was held on 18 December, where IGHPA acknowledged that it has received counter-affidavits from respondents. The court has allowed IGHPA to submit its own counter-affidavit within three weeks. However, the court has not stayed the tender and would hear the matter next on 1 February.

The petitioners have argued that the government cannot arbitrarily choose any person it likes for entering into a commercial relationship, thereby discriminating between similarly situated persons.

“They further submit that the Supreme Court has repeatedly warned against specific clauses in tenders which have the effect of favouring a single tenderer,” the High Court order dated 29 November noted.

The green hydrogen space in the country is in a nascent stage and is expected to pick up in the coming years. Several players in the energy space, including Reliance Industries, Adani Group, Greenko and Avaada Group, have announced major plans for green hydrogen production in the country.

About 14 companies including Reliance Green Hydrogen and Green Chemicals Ltd, ACME Cleantech Solutions Pvt. Ltd and Avaada GreenH2 Pvt. Ltd have submitted bids for setting up green hydrogen plants under the SIGHT (strategic interventions for green hydrogen transition) scheme of the green hydrogen mission, according to the Solar Energy Corporation of India (SECI) website. Under the national green hydrogen mission, the government aims to bring a total investment of ₹8 trillion into the country by 2030.,aware%20of%20the%20development%20said.

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