Reliance Industries Ltd., owned by billionaire Mukesh Ambani, has formed a number of partnerships to develop its green energy sector, which includes investments in solar, batteries, and hydrogen and may account for over 10% of the company’s pre-tax income in five years, according to a study. The oil-to-retail behemoth disclosed a string of $1.2 billion agreements with REC, NexWafe, Sterling & Wilson, Stiesal, and Ambri.
According to research by stockbroker Bernstein, “with these investments, Reliance has acquired the know-how and technology portfolio needed developing an entirely connected from beginning to end renewables energy ecosystem through solar, batteries, and hydrogen.” “Reliance will establish manufacturing facilities in India and commercialize the acquired technologies.”
Reliance is anticipated to keep making investments in sustainable energy-related technology, such as fuel cells and essential materials.
According to our projections, we think that the renewable energy business may contribute over 10% of the company’s overall EBITDA by FY’26, provided all the plants are built and scaled up in accordance with the company’s schedule. “This will render Reliance a highly diversified corporation spanning E&P, refining, petrochemicals, clean energy, telecoms, retail, and internet, although we anticipate that the company will be split up given the ineffectiveness of such a corporate structure.”
Reliance still requires the technology to produce fuel cells, which it is anticipated to buy or license from a major player in the market like Plug Power, Ballard, or Ceres.
It could also have to make investments in important suppliers for the industry, such as cathode, separator, and electrolyte producers for the production of batteries, as well as MEA, catalysts, and bipolar plate producers for the production of fuel cells.
By 2030, Reliance hopes to produce 100 GW of solar energy and sell green hydrogen for $1 per kilogram. To reach these goals, it will invest $10 billion in the new energy sector over the following three years.
According to clean energy capex, Bernstein stated, “We see a route to Reliance building a clean energy business, which could be worth $36 billion.”
Reliance is establishing a green energy company to provide India with the machinery it needs for its green energy revolution.
Additionally, the company has pledged to achieve net carbon neutrality by 2035, which is sooner than every other energy provider in the area.
“Reliance has the relationships and the finance sheet, but it lacks the industrial expertise and technology that are necessary for success. Reliance has demonstrated that it can effectively enter new verticals, despite the fact that it is simple to discount its capacity to carry it off. The report stated, “We believe the same is true here.
Reliance opened a new chapter in its transition when it revealed plans to invest $10 billion in low-carbon energy at its stakeholders’ meeting in June.
Reliance will invest Rs 60,000 crore over the next three years to build four “giga factories” that would produce integrated solar PV modules, electrolyzers, fuel cells, and batteries that can store energy from the grid. These facilities will be situated at Jamnagar’s brand-new, 5,000-acre Green Energy Giga Complex. A further Rs 15,000 crore would be spent on partnerships, technology, and value chain investments for the new energy market.
“It’s difficult to imagine any firm that has transformed itself as much as Reliance has over the past ten years, from oil and gas to telecom, to retail, to the internet. This is a risky move, though, and many will wonder how Reliance adds value to these businesses beyond its status as one of the most prosperous Indian companies, it added.
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For $771 million, Reliance is purchasing REC Solar Holdings from China National Bluestar.
REC is a reputable producer of polysilicon, PV cells, and modules with facilities in Singapore and Norway. Reliance will construct a new integrated solar manufacturing facility in Jamnagar and increase capacity internationally using REC technology.
In order to jointly develop and commercialize monocrystalline green solar wafers at scale, Ambani’s company is investing USD 45 million in NexWafe. It is also acquiring 40% of the market-leading solar EPC and O&M supplier Sterling and Wilson Solar Limited (SWSL).
It has also agreed to work with Stiesdal of Norway to develop technologies and produce HydroGen Electrolyzers in India. Ambri, a US-based company, has received an additional investment of USD 50 million for the development and marketing of its liquid metal batteries for energy storage.
Reliance and Ambri are also negotiating the establishment of a sizable battery manufacturing facility in India.
“Overall, using solar, batteries, and hydrogen, Reliance is creating a fully integrated end-to-end sustainable energy ecosystem for clients. The value creation and profitability potential will be significant if Reliance can get this off because no other energy firm is spending throughout the whole new energy value chain, according to Bernstein.
