Adani bets $20 billion on green energy, takes on Reliance Industries

Adani Enterprises will invest $20 billion (Rs 1.48 trillion) over 10 years in the renewable energy supply chain, including power generation, manufacturing, transmission, and distribution. The announcement on investment size comes after Reliance Industries Ltd (RIL) in June launched its foray into green energy with a Rs 75,000-crore investment in the coming three years.

Gautam Adani, chairman, Adani Enterprises, on Tuesday said the company would triple its renewable power generation capacity over the next four years. Adani currently has 12.5 Gw of installed and 7 Gw of a planned thermal power capacity. 

The current installed renewable energy capacity of Adani stands at 15 Gw. Adani said the company would have more than 60 per cent of its installed capacity from renewable sources by then. Adani also said “no other company in the world is building on this scale”.

RIL plans to invest in solar power generation and manufacturing, hydrogen production, e-fuels, and energy storage under its “New Energy and New Materials” division.

Adani Green Energy Ltd (AGEL) in May this year acquired SB Energy’s portfolio totalling 4.9 Gw at the enterprise value of $3.5 billion (Rs 25,574 crore approximately). This made the company the largest renewable energy firm in India with cumulative 25 Gw of developed and under construction renewable energy projects.

“This puts us well on track to be the world’s largest renewable power generating company by 2030. This also opens up several new pathways for us, including setting up of one of the largest green hydrogen projects in the world,” Adani said.

“Our actions clearly indicate that we are putting our money where our mouth is,” Adani added while speaking at the JP Morgan Investment Summit.

The target now pits the port-to-power behemoth against global giants. Currently, Italy-based Enel spa has a renewable power generation capacity of 48.6 Gw though it too is targeting 120 Gw by 2030.

Next in the pecking order comes China Energy Investment Corp (China Energy), which was established in 2017. The company’s website states that it is the world’s largest producer of coal, thermal power, wind power, as well as coal-to-liquids and coal chemical products.

Back home, Adani has a challenger in Tata Group, which has announced it would only invest in green energy. Tata Power is targeting 25 Gw by 2030. Another is state-owned giant NTPC, which is playing a crucial role in bundling coal and green power. The government-owned company plans to expand three times its existing installed renewable capacity of 1 Gw to reach 3 Gw by 2030.

Adani had in 2020 announced the group would invest over 70 per cent of the budgeted capex of its energy vertical in clean energy and energy-efficient systems. It would be the first Indian company to power all its data centres with renewable energy by 2030, he said.

Adani said 43 per cent of their current EBITDA (earnings before interest, tax, depreciation, and amortisation) from utilities are from the green business. The group in its businesses would exceed the 33-35 per cent carbon intensity reduction goal set for the country.

“We are confident our integrated value chain, our scale, and our experience put us on the path to be the producer of the least expensive green electron anywhere in the world,” said Adani.

Among other fields that will play a role in contributing to green energy, Adani said their port business would be the first one in the group to be net zero by 2025.