India’s green hydrogen and derivatives producer AM Green said Friday it’s working on a power purchase agreement with Coal India Limited (CIL) for renewable electricity.

The companies signed an MOU targeting the long-term supply and procurement of 4.5 gigawatts of renewable energy. The initial plan estimates 2.5-3 GW of solar and 1.5-2 GW of wind power.

AM Green says the deal is estimated at around INR 250 million ($2.92m) and it would involve building wind farms in the southern states of the country, and solar plants in states such as Gujarat and Rajasthan.

The power will be used to run electrolysers to produce green hydrogen and green ammonia across AM Green’s projects. The company plans to use pumped hydro storage to ensure a steady supply of green energy, Kallanish learns.

Overall, AM Green is planning to produce 5 million tonnes/year of green ammonia by 2030. The volume, equivalent to 1m t/y of green hydrogen, represents a fifth of India’s green hydrogen production target.

“While coal remains our mainstay in meeting India’s expanding energy needs in the near term, our plans include a proactive role in building a greener and more sustainable future,” comments P M Prasad, CIL chairman. “This is in consonance with our commitment to become the country’s integrated energy provider.”

The Indian government is optimistic that it can replicate its success in bringing down renewables production costs for green hydrogen. New and renewable energy minister Pralhad Joshi said earlier this month that green hydrogen will be a key enabler in India’s vision to become a developed nation by 2047.

New Delhi has recently launched its green hydrogen certification scheme to ensure the country produces “truly green” hydrogen that is internationally “attractive.”