Tatsat Chronicle Magazine

RIL green energy business might contribute 10% of EBITDA in five years

October 25, 2021

By 2030, Reliance(RIL)plans to produce 100 gigawatts of solar power and green hydrogen at a cost of $1 per kilogramme

Reliance Industries Ltd (RIL), owned by billionaire Mukesh Ambani, has formed a slew of partnerships to build its green energy sector, which includes solar, battery, and hydrogen investments and may generate over 10% of the company’s pre-tax profits in five years, according to a report. The oil-to-retail conglomerate announced a slew of new agreements, totaling USD 1.2 billion, with REC, NexWafe, Sterling and Wilson, Stiesal, and Ambri. In a report, brokerage Bernstein stated, “With these investments, Reliance has acquired the skills and technology portfolio to begin to develop a fully integrated end-to-end renewables energy ecosystem through solar, batteries, and hydrogen.” “The acquired technologies will be commercialised, and manufacturing units will be established in India,” says Reliance.

Reliance is likely to continue to invest in sustainable energy technology such as fuel cells and critical materials. “Based on our calculations, we believe the new energy business may contribute over 10% of the company’s total EBITDA by FY’26,” it stated, “provided all plants are developed and scaled up on the company’s timeframe.” “This will turn Reliance into a highly diversified conglomerate with interests in E&P, refining, petrochemicals, clean energy, telecoms, retail, and the internet, yet we believe the business will be divided up due to the inefficiency of such a corporate structure.”

Reliance still requires fuel cell technology, which it is likely to acquire or licence from one of the industry’s leading companies, such as Plug Power, Ballard, or Ceres. It may also need to invest in key industry suppliers such as cathode, separator, and electrolyte makers for battery manufacturing, as well as MEA, catalysts, and bipolar plates for fuel cell manufacturing. By 2030, Reliance plans to produce 100 GW of solar power and green hydrogen at a cost of USD 1 per kg. It plans to invest USD 10 billion in the new energy sector over the next three years to meet these goals.