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Indian Multinational commits $10bn to develop India’s clean energy ecosystem

Reliance Industries commits $10bn to develop India’s clean energy ecosystem

Reliance Industries is to set up a clean energy ecosystem, consisting of a green hydrogen site as well as four giga-factories for manufacturing solar PV module, electrolysers used for hydrogen generation, energy-storage batteries and fuel cells.

“RIL signed MoU (Memorium of Understanding) today with the Government of Gujarat for a total investment of Rs 5.95 lakh crore as part of Investment Promotion Activity for Vibrant Gujarat Summit 2022. These projects will create 10 lakh direct/indirect employment opportunities in the state,” the firm said in a statement.

“RIL is developing an ecosystem for assisting Small and Medium Enterprises (SMEs) to  encourage entrepreneurs to embrace new technologies and innovations, leading to greater use of renewable energy and green hydrogen.

Moving towards a clean energy ecosystem

RIL will also invest funds in setting up new energy manufacturing-integrated renewable manufacturing systems. This will include manufacturing of solar photovoltaic module components like polysilicon, wafer, cell and module, along with electrolysers, energy-storage batteries and fuel cells.

Mukesh Ambani, RIL’s chairman, the largest publicly traded company has said he will build up its energy business over the course of three years.

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“Although the costs of hydrogen from electrolysis today are high, they are expected to fall significantly in the coming years. New technologies are emerging for hydrogen storage and transportation, which will dramatically reduce the cost of distribution,” Ambani said the International Climate Summit 2021.

“The government is planning to create an enabling green hydrogen ecosystem which will attract investments,” he added.

Constructing larger green energy facilities

Capital will be used to build a green energy giga complex in Jamnagar, the largest city on the west coast of India. Spanning more than 5,000 acres, the site, which would be one of the world’s largest green energy facilities is in the same city as the Reliance’s Jamnagar Refinery. It is the biggest oil refinery in the world, with a capacity of 1.24 million barrels of oil per day. 

Reliance generated about 45 million tons of carbon dioxide emissions much of it coming from its Jamnagar refineries, putting the company among the top such emitters in India, according to Bloomberg data.

The new investments are a marked pivot away for the Indian conglomerate whose riches were created by oil. Almost nearly 60% of its $73 billion in annual revenue from its oil-related business.

Gaining interest from investors

However, fossil fuel companies are looking to invest in new sectors, which are proving lucrative. Indian renewable energy sector is the fourth most attractive renewable energy market in the world. India was ranked fourth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2020.

There is an uneasy tension between firms still deeply embedded in fossil fuels and transitioning into green energy. M.V. Ramana, an energy policy scholar and professor at University of British Columbia said: “If you look at what Reliance’s trajectory has been, it is one of expansion of its fossil fuels business.” 

Moving away from oil and gas will be difficult “because it is going to affect their bottom line,” adds Ramana.

What are your views on a clean energy ecosystem? Get in touch.

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