EXPLAINED: The Acquisitions And Deals Reliance Is Using To Give Shape To Its Green Goals

·6-min read

In July this year, Reliance Industries Ltd chairman Mukesh Ambani had unveiled an ambitious Rs 75,000 crore plan that aims to see the company become carbon neutral within the next 15 years. The breadth of its green goals encompasses the setting up of four “giga factories” to “manufacture and fully integrate all the critical components of the new energy ecosystem”. Towards that end, the company has executed strategic purchases and partnerships with leading companies globally in the renewables sector. Here’s a look at its recent moves towards achieving a “rapid transition to a new era of green, clean and renewable energy”.

What’s Behind RIL’s Green Push?

At its 44th annual general meeting, Reliance Industries chairman Mukesh Ambani had reiterated that the company, which owns and operates the world’s largest oil refinery at Jamnagar in Gujarat, is gearing to embrace a radical switch that will see it cut down its carbon footprint to nil by 2035.

With its eye on a “rapid transition to a new era of green, clean and renewable energy”, RIL will “make its New Energy business a truly global business”, Ambani had said, adding that central to its ambitions was a move to bridge the green energy divide “in India and globally” while providing a boost to the objectives of Atmanirbhar Bharat as enunciated by PM Narendra Modi.

The approach, according to Ambani, was grounded in the understanding that “the age of fossil fuels, which powered economic growth globally for nearly three centuries, cannot continue much longer” given the threat it increasingly represents for the environment and life on Earth.

Ambani had noted that India will have an important role to play in transforming the global energy landscape as it is “one of the biggest energy markets in the world”.

ALSO READ: Rs 75,000-cr Plan by Which Ambani-Led Reliance Wants To Propel India to a Green Future

What Are The Green Goals Adopted By RIL?

At the AGM, the RIL chairman had remarked that just as Jamnagar — which has an aggregate capacity of 1.24 million barrels per day (bpd) — “was the cradle of our old energy business… (it) will also be the cradle of our new energy business”.

The company, Ambani had announced, had already started work on setting up the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, which it intends to be “amongst the largest such integrated renewable energy manufacturing facilities in the world”.

The company has lined up cumulative investments of over Rs 60,000 crore over the next three years to put together “four giga factories”, which will “manufacture and fully integrate all the critical components of the new energy ecosystem”.

The four component factories comprise an integrated solar photovoltaic module factory for the production of solar panels, an advanced energy storage battery factory, an electrolyser factory for the production of green hydrogen and a fuel cell factory.

Through these efforts, Ambani hopes RIL will “establish and enable at least 100GW of solar energy” to meet the target set by PM Modi of India achieving 450GW of renewable energy capacity by 2030.

How Will The New Purchases Help RIL Achieve Its Targets?

On October 10, RIL announced two big ticket moves — both under Reliance New Energy Solar Ltd (RNESL), a wholly owned RIL subsidiary — designed to propel it towards becoming “a global player in the renewable industry” and provide the company’s new energy initiative a “global and significant operating and technology platform”.

The first of the purchases, of Norway-based solar panel maker REC Group, was worth USD 771 million. Ownership of REC, acquired from the China National Bluestar (Group) Co. Ltd., gives RIL access to crucial knowhow in the renewables sector with R&D being something India is seen as being lagging on. REC holds or has applied for over 600 utility and design patents and RIL noted its “strong focus on research and development”, which it is looking to now hitch to the comany’s “world-class innovation, scale, and operational excellence” with the goal being to “further accelerate path-breaking technological developments” along with the introduction of new products.

A recognised industry player, REC is among the global leaders in solar modules, which have a reputation for “efficiency, reliability and long-guaranteed life”, the company said, noting especially REC’s use of heterojunction (HJT) technology that “helps its modules surpass the performance of other commonly used technologies in the industry”. Reliance said it will use REC’s technology to make metallic silicon and solar panels at its Jamnagar gigafactory, where the annual capacity is expected to expand to 10 gigawatts from 4 gigawatts.

“Compared to its global counterparts, India is still a laggard in terms of technology adaptiveness and competitiveness. REC has a local base as well as a global presence. So, both things Reliance can leverage with this acquisition,” Jyoti Gulia, founder of JMK Research, told CNBC TV18.

If the REC purchase will see RIL become one of the major players globally in solar cell manufacturing, the second transaction announced on October 10 — for a 40 per cent stake in Sterling & Wilson Solar Ltd (SWSL) — is intended to vault the company into the top of the EPC (engineering, procurement, construction) pile in renewables.

RIL said the partnership with SWSL will give it access to engineering and project management skills and “complement Reliance’s proven strengths in digital technology, engineering, and procurement and project execution”. SWSL, which has a presence across 24 countries, has already executed more than 11GW of solar turnkey projects globally and is regarded as being a leader in the EPC and operations & maintenance sector.

The two deals thus give Reliance access to the latest tech and knowhow along with global manufacturing capabilities.

Has RIL Made Other Investments As Part Of Its Green Drive?

In August this year, Reliance had announced a USD 50 million investment, again through RNESL, in the US-based Ambri Inc., a battery storage technology that makes long-duration batteries. The deal gives RIL access to Ambri’s technology for making batteries that require minimal maintenance and can store electricity for up to 10 hours.

Then there are partnerships that it has entered with the German NexWafe GmbH, which manufactures silicon wafers for solar panels, and the Denmark-based Stiesdal A/S. While the USD 29 million that RIL is investing in NexWafe GmbH will help with its solar energy production targets, the Stiesdal deal is for technology development and manufacturing of the company’s hydrogen electrolysers in India.

Note: Network18 and TV18 – the companies that operate news18.com – are controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary

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