Reliance’s inexperienced vitality enterprise taking form, could contribute 10% of EBITDA in 5 yrs, Vitality Information, ET EnergyWorld

RIL chairman Mukesh Ambani

RIL chairman Mukesh AmbaniNew Delhi: Reliance Industries Ltd. billionaire Mukesh Ambani has formed a wave of partnerships to shape his green energy business, which includes solar, battery and hydrogen investments and could contribute nearly 10 percent of the company’s pre-tax profits in five years, a report said.

The oil-to-retail group announced a wave of partnerships with REC, NexWafe, Sterling and Wilson, Stiesal and Ambri for 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 through solar, batteries and hydrogen,” broker Bernstein said in a report. “Reliance will commercialize the acquired technologies and establish manufacturing facilities 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 add nearly 10 percent to the company’s total EBITDA by fiscal year 26, provided all factories are built and ramped up on schedule,” it said. “This will make Reliance a highly diversified conglomerate spanning E&P, refineries, petrochemicals, clean energy, telecommunications, retail and Internet, although we suspect the company will be split up due to the inefficiency of such a corporate structure.”

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

It may also need to invest in key suppliers to the sector such as manufacturers of cathodes, separators and electrolytes for battery manufacturing, and could also invest in MEA, catalysts and bipolar plates for fuel cell manufacturing.

Reliance aims to have 100 GW of solar production and green hydrogen costs of $ 1 per kg by 2030. The company will spend $ 10 billion on the new energy business over the next 3 years to achieve these goals.

“Based on investing in clean energy, we see a way Reliance can build a clean energy business that could be worth $ 36 billion,” said Bernstein.

Reliance is building a green energy business to provide the equipment India needs for its green energy revolution. The company is also committed to net zero carbon by 2035, earlier than any other energy company in the region.

“While Reliance has the balance sheet and the relationships, it lacks the technology and manufacturing expertise that are essential to success. While their ability is easy to dismiss, Reliance has shown that they can successfully break into new industries. We believe the same is true here, “the report said.

Reliance announced at its shareholder meeting in June its plan to invest $ 10 billion in low-carbon energy, marking another chapter in the company’s transformation.

Over the next 3 years Reliance will spend 60,000 billion rupees to build four “giga-factories” to produce integrated solar PV modules, electrolysers, fuel cells and batteries to store energy from the grid. These facilities will be located in the new 5,000 hectare Green Energy Giga Complex in Jamnagar. Another 15,000 billion rupees will be used for value chain investments, technology and partnerships for the new energy business.

“From oil and gas to telecommunications to retail and the Internet, it’s hard to imagine another company that has reinvented itself as Reliance has over the past decade. This is a bold move, however, and many will question the source of Reliance’s value in these industries aside from its position as one of India’s most successful conglomerates, “it said.

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

REC is an established manufacturer of polysilicon, PV cells and modules with plants in Norway and Singapore. Using REC technology, Reliance will build a new integrated solar system in Jamnagar and expand capacity worldwide.

Ambani invests $ 45 million in NexWafe to jointly develop and commercialize large-scale monocrystalline green solar wafers and acquires 40 percent of leading solar EPC and O&M provider Sterling and Wilson Solar Limited (SWSL).

It has also signed a pact with Norway’s Stiesdal for the technology development and manufacturing of Stiesdal’s HydroGen electrolysers in India. A further US $ 50 million was invested in the US company Ambri to develop and market Ambri’s liquid metal batteries for energy storage.

Reliance is also in discussion with Ambri about building a large battery manufacturing facility in India.

“Overall, Reliance is building a fully integrated end-to-end renewable energy ecosystem for customers through solar, batteries and hydrogen. No other energy company is investing in the entire new energy value chain, but if Reliance can do it it will be value creation. “And the earnings potential will be significant,” said Bernstein.