Indian solar company ACME is to splash billions of dollars building a giant 1.5GW green hydrogen and ammonia plant in the state of Tamil Nadu, southern India, just weeks after announcing plans for a similarly-scaled project in neighbouring Karnataka.

The 1.5GW electrolyser ACME envisages for the project would be powered by a 5GW solar plant, and produce 1.1 million tonnes of ammonia.

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Ammonia and hydrogen from the plant will be used to decarbonise fertiliser production, for refining and steel manufacturing and for power. ACME is also weighing the possibility of building an “ecosystem of smaller units” around the project, with the help of the government of Tamil Nadu.

Capital investment in the project will amount to ₹52,474 crore ($6.55bn), ACME said, taking total investment pledges for the two south Indian projects to $13.2bn.

But while the 1.2 million tonne, $6.7bn Karnataka project will see some investment from the state authorities, the Tamil Nadu government will not be putting up cash for the latest scheme. At least some of the capital for the project will be sourced from the debt and equity markets, Recharge understands.

“This will be one of the largest plants in India and perhaps the largest in the world,” said Manoj Upadhyay, chairman of ACME Group. “The project requires four ingredients — solar radiation, access to port, availability of land and skilled resources. Tamil Nadu offers all of these.”

With vast renewables resources and access to higher-grade iron ore, India is ideally placed to stake out a position as a green steel manufacturing hub, according to a report last year from BloombergNEF.

However steel producers will need to invest in electric furnaces and in new production capacity that can produce direct reduced iron from hydrogen rather than fossil gas, as well as in renewable energy capacity to support them. India’s government, which is targeting five million tonnes of green hydrogen production by 2030, has said it will ease grid access for green H2 producers.

ACME’s other H2-based project, a green ammonia plant in Duqm, Oman, which it is developing with Norway’s Scatac, aims to produce 1.2 million tonnes of ammonia per year using a 3.5GW electrolyser and 5GW of solar.