RIL ready to double its green energy investment to ₹1.5 trillion

In 2021, RIL announced an investment of ₹75,000 crore to build its new energy business. “Once proven at scale, RIL is prepared to double the investment to scale up its manufacturing ecosystem. The investment of ₹75,000 crore with a readiness to double investment will further the company’s goals related to energy transition, enhance renewable energy usage and operational economic efficiency, and broaden focused research for the new energy business," according to the company’s latest annual report.

A person in the know of RIL’s investment strategy for new energy, said it has already invested around ₹50,000 crore to develop a green energy Giga complex at Jamnagar in Gujarat. “It plans to invest at least ₹1.5 trillion in total into green energy capacities. After the initial ₹75,000 crore, the exact resources and areas where additional ₹75,000 crore will be invested is still to be decided," he said.

“RIL invested in and formed partnerships with leading companies in the fields of solar power, batteries and electrolysers," the company said in the report. RIL is in advanced talks with leading electrolyser technology players globally to establish a Giga-scale electrolyser manufacturing facility in Jamnagar, it added.

“After proving cost and performance targets, the company also aims to progressively commence the transition from grey to green hydrogen by 2025," according to the report.

RIL has been making significant progress in developing the Dhirubhai Ambani Green Energy Giga Complex, spread over 5,000 acres at Jamnagar. The ₹75,000 crore will be primarily invested in setting up solar, wind and electric battery manufacturing plants.

RIL’s increased investment target in new energy, the highest among Indian companies, but lower than global peers, assumes significance amid a drive to achieve net zero emissions, primarily spearheaded by Asian countries, which accounted for over 50% of carbon dioxide emissions in 2020. China, Taiwan, Indonesia, Singapore and Australia have initiated large-scale wind and solar projects to fulfil their commitment to cleaner energy sources.

In India, RIL is competing with the Tata and Adani groups in the new energy space. While Adani Green aims to achieve 45 GW of renewable energy capacity by 2030 and is working towards its net-zero target by 2050, Tata Power said it will be investing $9.5 billion in renewables over the next five years, as it aims to double the share of clean energy in its portfolio.

Several large global companies are also ramping up their investments in sustainable energy. Texas-based ExxonMobil and UK’s BP plc seek to achieve net-zero emissions by 2050. While ExxonMobil is set to invest over $15 billion by 2027 on lower-emission initiatives, BP will raise investments on low-carbon energy by $3-5 billion every year until 2025 from $1 billion in 2022.

Shell, which was one of the first oil and gas giants to announce its net zero ambitions by 2050, has lowered its original carbon emission reduction target by 20-30%, as it is required to keep its investments going in oil and gas to meet demand, the company said. Shell has been investing around $1 billion every year in low-carbon energy, such as charging for electric vehicles, hydrogen, biofuels and electricity generated by wind and solar power, and is preparing to increase it to around $2 billion, depending on commercial opportunities, it added.

Tata Power has accelerated its net zero target to 2045, according to N. Chandrasekaran, chairman of Tata Sons, which had previously set a goal of hitting the mark by 2050.

For Adanis, as per a June 2022 announcement, France’s TotalEnergies was to take 25% in Adani New Industries Ltd (ANIL), which is to invest $50 billion over 10 years in a green hydrogen ecosystem that includes an initial production capacity of 1 million tonnes before 2030.

On the other hand, RIL is building world-scale assets to produce new-age material, green energy, green chemicals, transforming our oil-to-chemical business into a more sustainable model targeting circularity and net carbon zero.

With a plan to invest around ₹75,000 crore over a span of three years, RIL aims to establish and enable 100 GW of solar energy by 2030; Build five giga factories—solar photovoltaic module factory, an advanced energy storage battery factory, an electrolyser factory, a fuel cell factory, and a power electronics factory.

RIL says in its report that in the coming days it will partner with leading companies globally in solar, battery, and electrolyser space.

While revealing the rationale behind its ₹1.5 trillion investment target in new energy, RIL said it will focus on bioenergy, offshore wind, and other non-conventional sources; maximise crude to chemicals integration and create a portfolio of advanced and speciality materials.

RIL’s 10 GW solar PV cell and module factory at Jamnagar, which will commence production by 2024, aims to scale the plant to 20 GW by 2026.

Alongside, RIL has formed strategic partnerships with Lithium Werks, Faradion and Ambri.

“RIL aims to start production of battery packs and scale up to a fully integrated 5 GWh annual cell-to-pack manufacturing facility by 2024. Reliance plans to further scale this capacity to 50 GWh annually by 2027," said RIL.

RIL’s businesses have captive energy requirements, which underpins the company’s ambitious giga-scale manufacturing operations, entailing an initial ₹75,000 crore investment.

“Upon validating the feasibility of this initiative at scale, Reliance is ready to double its investment to further scale up the manufacturing ecosystem," said RIL.

Mukesh D. Ambani, RIL’s chairman and managing director, said, “The world is entering a new energy era, which is going to be highly disruptive. The age of fossil fuels, which powered economic growth globally for nearly three centuries, cannot continue much longer."