IOC cancels green hydrogen tender again after bidders' disinterest

Only two parties submitted bids for company's tender to construct India's inaugural green hydrogen plant in Panipat

State-run Indian Oil Corporation Ltd (IOCL) has withdrawn a tender for constructing India's first green hydrogen plant at its Panipat refinery in Haryana for the second time, the Economic Times is reporting.

IOCL, on Monday,  marked the tender as "cancelled" on its website. The tender was pulled due to only receiving two bids, the report said citing sources. Previously, it had been reported that the bidders were GH4India and Noida-based Neometrix Engineering.

This tender was noteworthy as it marked India's first venture into determining the cost of green hydrogen via competitive bidding.

GH4India is a collaborative venture equally owned by IOCL, ReNew Power, and Larsen & Toubro.

 

The cancellation of first tender

In August last year, IOCL had invited bids for establishing a green hydrogen production unit with a capacity of 10,000 tonnes per annum at its Panipat refinery. This unit was intended to be built, owned, and operated for 25 years.

According to the tender terms, the winning bidder was required to commence hydrogen gas delivery within 30 months of the project's award. The project involved a 75 MW electrolyser capacity to generate 300 MW of clean energy, with an overall capital expenditure estimated at $400 million.

However, industry participants highlighted several clauses in the bid document that appeared to favour GH4India. The initial tender was reportedly cancelled after an industry association filed a case in the Delhi High Court, arguing that some of its conditions were anti-competitive and biased towards GH4India.

Fixing green hydrogen price

This initiative was aimed at being India's first attempt to establish the price of green hydrogen through a bidding process. Despite initial interest from leading engineering and industrial gas companies, many did not submit bids, reflecting the outcome of the previous year's tender. That earlier tender also faced legal challenges due to allegations of anti-competitive practices.

IOCL explained that the second tender process included several extensions to allow bidders sufficient time to submit their proposals.

Around 30 entities obtained pre-bid documents in May, including Indian firms like Inox-Air Products, Acme, Tata Projects, and NTPC, as well as international companies such as Siemens, Petronas/Gentari, and EDF. The technical bids were recently opened, with the date for the price bid announcement yet to be decided.

Why were bidders apprehensive

Prospective bidders have raised concerns about the eligibility criteria, specifically the requirement for experience in operating hydrogen systems, EPC, and electrolysers. The criteria said that a qualified bidder must have EPC experience and have operated a refinery, petrochemical, or fertiliser plant for at least 12 months.

This led some potential bidders to request deadline extensions to form joint ventures with industrial gas producers, as only a limited number of companies have the necessary scale and experience.