The oil conglomerate has announced a wave of partnerships with REC, NexWafe, Sterling and Wilson, Stiesal and Ambri at a total cost of $ 1.2 billion.

“With these investments, Reliance has acquired the expertise and technology portfolio to begin building a fully integrated end-to-end renewable energy ecosystem using solar, battery and hydrogen power,” said the brokerage firm Bernstein in a report. “Reliance will commercialize the acquired technologies and set up manufacturing plants in India.”

Reliance is expected to continue investing in technologies such as fuel cells and key materials for the clean energy sector.

“Based on our assumptions, we believe the new energy business could contribute almost 10% of the company’s total EBITDA by FY26, assuming all factories are built and assembled in power according to the company’s schedule, ”he said. “This will make Reliance a very diverse conglomerate spanning E&P, refining, petrochemicals, clean energy, telecommunications, retail and the internet, although we suspect the company will be split given the inefficiency of the business. ‘such a corporate structure. “

Reliance still needs the technology for fuel cell development, which the company is expected to acquire or license to one of the industry leaders such as Plug Power, Ballard or Ceres.

It may also need to invest in key industry suppliers, such as manufacturers of cathodes, separators, and electrolytes for battery manufacturing, and may also invest in MEAs, catalysts, and bipolar plates for manufacturing. of fuel cells.

Reliance is targeting solar production of 100 GW and green hydrogen costs of $ 1 per kg by 2030. It will spend US $ 10 billion on new energy activity over the next 3 years to achieve these goals.

“Based on the clean energy capital spending, we see a way for Reliance to build a clean energy business, which could be worth $ 36 billion,” Bernstein said.

Reliance is building a green energy company to supply the equipment India will need for its green energy revolution.

Additionally, the company has pledged to be net zero carbon by 2035, which is sooner than any other energy company in the region.

“While Reliance has the track record and the relationships, it lacks the technology and manufacturing know-how that will be critical to success. While it’s easy to dismiss their ability to achieve this, Reliance has shown it can successfully expand into new verticals. We believe the same is true here, ”the report said.

Reliance, at its June general meeting, announced plans to invest $ 10 billion in low-carbon energy, marking a new chapter in the company’s transformation.

Over the next 3 years, Reliance will move ??60,000 crore to build four “gigantic factories” to manufacture integrated photovoltaic modules, electrolysers, fuel cells and batteries to store grid energy. The site for these plants will be located in the new 5,000-acre Green Energy Giga complex in Jamnagar. An additional amount of ??15,000 crore will be used for value chain investments, technology and partnerships for the new energy business.

“From oil and gas to telecommunications, retail and the Internet, it’s hard to think of another company that has reinvented itself as much as Reliance has over the past decade. It’s a bold move, however, and many will wonder what the source of Reliance is. of value is in these industries, other than their position as one of the most successful Indian conglomerates, ”he said.

Reliance acquires REC Solar Holdings from China National Bluestar for $ 771 million.

REC is a well established manufacturer of polysilicon, photovoltaic cells and modules with factories in Norway and Singapore. Using REC technology, Reliance will build a new integrated solar manufacturing plant in Jamnagar and increase its capacity globally.

Ambani’s company invests $ 45 million in NexWafe to jointly develop and commercialize monocrystalline green solar wafers on a large scale, and acquires 40% of leading solar supplier EPC and O&M Sterling and Wilson Solar Limited (SWSL).

It has also signed a pact with the Norwegian company Stiesdal for the technological development and manufacture of the HydroGen electrolysers of Stiesdal in India. An additional $ 50 million has been invested in the American company Ambri to develop and market Ambri’s liquid metal batteries for energy storage.

Reliance is also in discussions with Ambri to set up a large-scale battery manufacturing plant in India.

Overall, Reliance is building a fully integrated, end-to-end renewable energy ecosystem for its customers through solar, battery and hydrogen power. No other energy company is investing in all of the new energy value chain, but if Reliance can achieve it, the value creation and earning potential will be substantial, “said Bernstein. PTI ANZ MKJ

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