Adani vs Reliance: Stage is set for India's Green Energy Revolution

Just weeks after Mukesh Ambani announced a $10-billion investment by his Reliance Industries over the next three years in clean energy, Gautam Adani committed an outlay of $20 billion over the next decade for the sector. And within weeks of that, Ambani’s Reliance Industries on October 10 announced two key deals on the same day -- acquisition of Norway-based REC Solar Holdings for $771 million, and purchase of a 40% stake in Shapoorji Pallonji Group company Sterling & Wilson Solar for $370 million.

These investments and the increased activity in the green space come against the backdrop of pressures from both investors and governments to lower carbon footprints for fighting climate change and global warming. Let’s look at the broad goals of the two groups.

Reliance has announced setting up of four “giga factories” to make solar modules, hydrogen, fuel cells, and a battery grid to store electricity, at a cost of $8.1 billion. It will also invest $2 billion in value chain, partnerships and future technologies. It plans to facilitate solutions for large renewable plants across the world and become net carbon-zero by 2035.

Accelerating its transition to green energy, Reliance Industries announced two major deals on October 10. Its unit Reliance New Energy Solar has acquired Norway-based REC Solar Holdings for $771 million from Chinese state company China National Bluestar Group. And it also agreed to acquire a 40% stake in Shapoorji Pallonji Group company Sterling & Wilson Solar for $370 million. 

REC, which has factories in Norway and Singapore, manufactures solar cells and modules along with solar-grade raw polysilicon. Reliance plans to use REC’s technology, comprising 600 patents, to manufacture metallic silicon and solar panels at its gigafactory in Gujarat’s Jamnagar.   

Sterling and Wilson, on the other hand, is a leading solar engineering and construction contractor. It has installed 11.4 Gw of solar power projects across the world, and also provides operations and maintenance services.

In August this year, Reliance had invested $50 million in US energy storage startup Ambri, which makes batteries that can store energy for up to 24 hours in a cost-effective manner. It is in talks with Ambri to set up a large-scale battery manufacturing facility in India. 

Adani Group, meanwhile, aims to triple the share of renewable power generation capacity in its total portfolio to 63% from the present 21%. It wants to make Adani Ports a net-zero carbon emitter by 2025 and power all data centres with renewable energy by 2030. It has also said that it will spend 75% of its planned capital expenditure until 2025 on green technologies.

This month, the group’s renewable energy arm Adani Green Energy completed the $3.5-billion acquisition of SB Energy India, which was an 80:20 joint venture between Japan’s SoftBank Group and India’s Bharti Group. The transaction marks the largest acquisition in the renewable energy sector in India. 

Both companies are looking to capitalise on Prime Minister Narendra Modi’s target of increasing the country’s renewable energy capacity fourfold to 450 gigawatts by 2030. Adani currently has an installed renewable energy capacity of 20 gigawatt, while Reliance wants to establish 100 gigawatts of solar energy by 2030. Adani plans to invest the $20 billion across renewable energy generation, component manufacturing, transmission and distribution businesses.

Adani group chairman Gautam Adani said. Quote… "This opens up several new pathways for us, including setting us up to be one of the largest green hydrogen producers in the world"… unquote.

Ambani, whose business generates 60% of its revenue from oil refining and petrochemicals, had said earlier that India could bring down the cost of hydrogen to $1 per kg within a decade. 

Meanwhile, hinting at a foray in hydrogen production, Adani promised to produce the world’s cheapest ‘green electron’.

The industrialists have a monumental task ahead to turn their goals into reality. We will have to wait and see how they fare in this transition.