ONGC Announces Massive Expansion in Renewable Energy Investment

ONGC Bets Rs 1 Trillion on Clean Energy, Takes Stake in Ayana Renewable Power

State-owned Indian oil and gas monolith Oil and Natural Gas Corporation (ONGC) is now making a bet big on clean energy. It said it will spend Rs 1 trillion over the decade to develop a portfolio of renewables at 10GW by 2030, an astronomical escalation in clean energy outlay.

This shift is part of ONGC's plans to lower its carbon footprint and follow the green energy route. The firm will triple its renewable energy investment, 100 times, from Rs 10 billion in FY25 to Rs 1 trillion by the end of the decade. This investment is a significant component of ONGC's long-term plan to address India's increasing energy demands, as well as sustain its conventional fossil fuel business.

ONGC's entry into the clean energy business involves investing in wind energy and solar power, compressed biogas units, hydro units, and the manufacture of green ammonia. In particular, the company is to commission solar and wind power of 193 MW as well as plan to put up 25 biogas plants. ONGC also intends to commission green ammonia capacity of 1 million tonnes as well as green hydrogen of 180,000 tonnes.

The firm has also invited a tender for commissioning 1GW of wind and solar capacity. The projects will be financed by ONGC from the cash flows of the oil and gas business and debt raised to fund the development of its clean energy portfolio.

A spot of ONGC's renewable energy offer is its acquisition of Ayana Renewable Power. With NTPC's green energy unit, joint venture partner ONGC NTPC Green Energy (ONGPL), ONGC executed a share purchase agreement to acquire 100% of Ayana Renewable Power on an enterprise value of Rs 19,500 crore. It is the first strategic investment by ONGPL since its incorporation in November 2024 and will significantly add to the clean energy capacity of both the entities.

ONGPL, the 50:50 joint venture company of ONGC and NTPC, was established for India's transition to clean energy. Ayana Renewable Power acquisition has been considered the way forward towards realizing NTPC as well as ONGC's ambitious clean energy ambitions. ONGC has committed net-zero by 2038, and NTPC will reach 60GW of renewable capacity by 2032. Both of them are expected to benefit from this transaction in the way of fulfilling their respective targets as well as making India achieve its overall energy transition.

This transaction is at a time when large energy companies are investing large dollars in clean energy and are making large expansion plans. ONGC's foray into the clean energy sector is part of a broader trend in the energy industry, where companies are more open to reducing emissions and investing in renewable energy.

ONGC's shift to green energy is the broader plan of the world's sustainable energies. Because the world's nations are trying to reduce their usage of fossil fuels, companies like ONGC are increasing investment in renewable energy ventures. Not only is it a healthier move for the environment, but it also gets these companies ready for the future of energy when clean energy will account for a much larger percentage.

ONGC clean energy bids are all part of the bigger plan in leading India towards clean energy. India is moving towards clean energy, and the government has been attempting to achieve 500GW of non-fossil fuel capacity by 2030. ONGC is one of the strongest and largest energy giants in India, and it will be an important player in leading India with its clean energy investment.

Conclusion:The foray into the renewable sector is also aligned with increasing corporate pressure worldwide to be low-carbon and establish world climate ambition. By switching to clean energy, ONGC is making a move towards making India's, and the world's, game for the future an even stronger one.As the company continues to expand further its investments in renewable energy, it will be interesting to observe how its historical oil and gas business and its growing clean energy business evolve hand in hand for the next decade. Whether the strategy of ONGC pays off is a great case study in how other energy companies can fit together their fossil fuel business and growing demand for clean energy technologies.

Source:This article is based on information from Bloomberg and ONGC's official announcements.