Reliance Industries is building a green energy business to supply the equipment India will need for its green energy revolution, according to analysts.
“For solar, RIL can reach 100GW of installation by 2030, which is 36% of the total 2030 India solar capacity of 280GW. For batteries, it could also achieve a similar market share of 36% with a battery capacity of 50GWh versus expected battery capacity of 139GWh in 2030. For hydrogen, RIL can capture about 19% of the market with 16GW of cumulative electrolyzer capacity by 2030,” said Bernstein Research in a report dated 4 December.
At at 44th AGM in June 2021, RIL announced its plan to spend INR 75000 crore over the next three years in a “New Energy” business. As part of this, RIL is spending INR 60,000 crore to construct four “giga factories” to make integrated solar PV modules, electrolyzers, fuel cells, and batteries to store energy from the grid. These plants will be located at the new 5,000-acre Green Energy Giga Complex in Jamnagar. An additional 15000 crore will be used for investments across the value chain, technology, and partnerships for the New Energy business.
ET had on 22 August reported that RIL will commission 5GW of its 20GW solar modules capacity next year. Reliance is planning to enter solar manufacturing and generation with a target of 100GW of solar energy by 2030.
“RIL will commission 5GW of HJT modules and 5 GWh of LFP (lithium iron phosphate) battery capacity by 2QFY25. The company intends to use most initial production for captive set up of 20GW of renewable capacity- enough to meet its annual energy requirement,” said Jefferies India in a research report dated 5 December.
RIL will begin production at its solar PV (photovoltaic) and module factory, based on REC technology in Jamnagar. Through its wholly-owned subsidiary Reliance New Energy Solar, RIL acquired a 100% stake in Norway-headquartered REC Solar in 2021 for $771 million (₹5800 crore).
REC provides the high-efficiency solar panels with Heterojunction Technology (HJT). RIL targets to increase the HJT module efficiency to 26% by 2026 from the current 23% and further improve it to 28% through innovations like perovskite-tandem cell technology, the company said in its annual report for 2022-23, adding that it also aims to extend the life of PV modules from 25 to 50 years.
RIL has signed a supply agreement with China-based Suzhou Maxwell Technologies to buy a high-efficiency production line for HJT cells for 5 GW capacity.
Bernstein added that RIL will have integrated manufacturing starting from raw silica and polysilicon to ingot, wafers, to finished cells and modules. “For batteries, Reliance is looking to build large-scale grid batteries and will collaborate with global leaders on the technology. The first plant will start up in 2023-24 and scale up to 50GWh by 2027.”
On hydrogen, Reliance will build and install electrolyzers to produce green hydrogen, which can be used for transport and
stationary power applications through its self-produced fuel cells.
RIL could potentially achieve $10bn of revenue from the New Energy business in 2030, which represents 40% of the total addressable market or TAM.
“By 2030, we estimate RIL could capture 60%, 30%, and 20% of solar, battery, and hydrogen TAM, respectively. RIL plans to have 100GW of installed solar capacity by 2030, which is 35% of India’s targeted capacity of 280GW,” said Bernstein Research, adding that the biggest risk for investors is that Reliance has limited expertise in the technology required for batteries, fuel cells, solar PV, or electrolyzers. This will have to be acquired through investments or partnerships with key technology leaders. It also has no experience in mass manufacturing of New Energy equipment.
RIL’s scrip was trading at INR 2524.05. up 1.16% on the BSE, Monday afternoon.
