Billionaire Mukesh Ambani is leaving no stone unturned in his quest to building Reliance giga factories. Reliance is accelerating global collaborations--especially in technologies to manufacture green hydrogen and storage battery and photovoltaic cells--before beginning construction of giga factories. Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of Reliance Industries (RIL), plans to complete ₹60,000 crore investment by 2024 to build one of the largest integrated renewable energy manufacturing facilities in the world.
RIL is developing 5,000 acres of land in Jamnagar, Gujarat to build Dhirubhai Ambani Green Energy Giga Complex. It has two refineries and a petrochemical complex in the vicinity. The complex will have four giga factories -- an integrated solar photovoltaic module factory; an energy storage battery factory; an electrolyser factory for making green hydrogen; and a fuel cell factory for converting hydrogen into motive and stationary power.
In the third quarter result announcement, Ambani says that recent partnerships and investments in technology leaders in the solar and green energy space is illustrative of RIL's commitment to partner in the clean energy transition. "We continue to pursue growth initiatives and collaborate with global leaders who share our vision of a sustainable future for our planet," he adds.
Bank of America Securities said in a recent report that RIL is focusing on creating most advanced and integrated new energy ecosystem supported by its recent acquisitions. RNESL acquired REC Solar ($771 million), Sterling Wilson (a 25% stake for $240 million), Faradion ($170 million) and NexWafe ($30 million). It signed cooperation agreement with Denmark-based Stiesdal A/S for technology development, and manufacturing of hydrogen electrolyzers in India. RNESL along with strategic investors Paulson & Co. Inc. and Bill Gates, and a few other investors, announced an investment of $144 million in Ambri Inc, an energy storage company based in Massachusetts, USA. The investments are precursor to rollout of giga factories.
Goldman Sachs estimates Reliance's new energy business EBITDA at $12.2-$16.8 billion in FY40. It is expected to be $3.6-$4.5 billion by FY30. For new energy business, solar will be the key driver this decade followed by batteries and hydrogen in the next decade, the report says.
The photovoltaic giga factory will convert raw silica to poly silicon and to ingot and wafers. The wafers will be used to make high efficiency solar cells and modules. According to Ambani, Reliance will establish at least 100 giga watt (GW) of solar energy by 2030. "A significant part of this will come from rooftop solar and decentralised solar installations in villages," he says at the last annual general meeting. The company is exploring advanced electro chemical technologies for developing large-scale grid batteries to store the energy from the solar installations. RIL will collaborate with global majors for the battery technology.
The green hydrogen factory will be built essentially for promoting decarbonisation of sectors like transportation, power and other manufacturing. The fuel cell giga factory is expected to set the trend to replace internal combustion engines with non-polluting cells, which use oxygen from the air and hydrogen, to generate electricity. The only emission in the process is water vapour. Fuel cell engines can power automobiles, trucks and buses. They can also be used in stationary applications for powering data centres, telecom towers, emergency generators and micro grids and industrial equipment.
IIFL says that the solar photovoltaic business will witness a swift ramp up to 15GW global installations by FY25. Though RNESL is yet to make its strategy clear in segments such as hydrogen, battery backup and fuel cells.
RIL will also invest an additional ₹15,000 crore in value chain, partnerships and future technologies, including upstream and downstream industries.
"New energy will remain a key driver for RIL stock price in 2022 as RIL looks at technology acquisitions, and setting up of capacities in new energy," says JM Financial. RIL has also formed a new energy council with global experts for the project advisory. Ambani earlier stated that the company has technology specific start-ups in America, Europe, Australia and Asia on its radar for strategic partnerships or acquisitions.
