Reliance Industries has laid out an ambitious plan worth Rs 75,000 crore to pivot towards green energy as its chief Mukesh Ambani announced that the company will look to cut down its carbon footprint to nil by 2035 and join in the efforts to bridge the green energy divide “in India and globally." For this, the company shared an elaborate strategy that will see it rolling out its “New Energy and New Materials business" to achieve and aid the goal of a “rapid transition to a new era of green, clean and renewable energy". In the process, the Reliance Industries chairman said, the company “will make its New Energy business a truly global business".
Identifying The Challenge
Addressing shareholders at the virtual AGM on Thursday, Ambani said that fossil fuels are nearing the end of the road and the world needs to swiftly and decisively embrace green energy by moving “from dialogue to action, from commitment to urgent implementation on the ground".
“The age of fossil fuels, which powered economic growth globally for nearly three centuries, cannot continue much longer. The huge quantities of carbon it has emitted into the environment have endangered life on Earth," Ambani said.
Referring to his announcement last year that in 15 years, that is, by 2035, the company will become “net carbon zero", Ambani said the mission throws up three key questions:
“1. How do we increase our energy production while drastically reducing our carbon emission content?
“2. How do we meet India’s growing energy needs through domestic sources of energy, and not by importing carbon intensive fuels?
“3. How do we do so in a self-reliant and affordable way which benefits 1.35 billion Indians?"
Saying that the “the only answer to these problems lies in sustainable and equitable development in India and globally", Ambani noted that India will have an important role to play in transforming the global energy landscape as the country is “one of the biggest energy markets in the world".
Drawing Up The Roadmap
Reminding shareholders of the launch of its Jio cellular and digital services in 2016, Ambani said while that project was aimed at “bridging the Digital Divide in India", the launch in 2021 of its new energy business is with the goal of “bridging the green energy divide in India and globally".
The plan outlined by Ambani lies at the intersection of science and economics and puts the environment at the core of the proposed efforts. Integration, efficiency and hyper performance will be the watchwords in this endeavour, he added.
Stressing on the role of “hyper-integration", Ambani said that scientific knowhow will be complemented by continuous technological innovation “to build and operate truly integrated systems that deliver hyper-performance".
Noting the opportunities that beckon green initiatives in the present scenario, the Reliance Industries chairman said that the idea is to build “a model that catches the irreversible upward curve in the demand for green, clean and renewable energy in India and globally; and the downward curve in the cost of their production".
Towards that end, the company will look to improve on the “efficiency, performance and life-cycle" of assets and operations “to achieve total system optimisation and economics".
Charting Out The Course
Taking the shareholders through the specifics of what he said was a three-part plan, Ambani announced that the company has already started work on developing the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar. The city in Gujarat is where Reliance operates the biggest refinery in India and Ambani said that the Giga Complex “will be amongst the largest such integrated renewable energy manufacturing facilities in the world".
“Jamnagar was the cradle of our old energy business. Jamnagar will also be the cradle of our new energy business," Ambani said.
Talking up a total investment of over Rs 60,000 crore in the next 3 years, Ambani said that the first part of the plan is to build “Four Giga Factories" that will “manufacture and fully integrate all the critical components of the new energy ecosystem".
The four component factories will comprise “an integrated solar photovoltaic module factory" for the production of solar energy while “an advanced energy storage battery factory" will be set up for the storage of intermittent energy. An electrolyser factory will come up for the production of green hydrogen and, “for converting hydrogen into motive and stationary power", a fuel cell factory, too, is in the works.
Ambani said the company is “highly inspired by the goal set by our Prime Minister Shri Narendra Modiji for India to achieve 450GW of renewable energy capacity by 2030" and declared that “Reliance will establish and enable at least 100GW of solar energy" to meet that target.
Crucially, rooftop solar and decentralised solar installations in villages will play a major part in Reliance’s efforts to achieve that goal, Ambani said, the idea being that it “will bring enormous benefits and prosperity to rural India".
Spelling out the second part of the plan, Ambani pointed to an interlocking system of “infrastructure and materials" support for the four giga factories. Announcing an additional spend of Rs 15,000 crore to set up “value chain, partnerships and future technologies", Ambani said that the overall initial investment “from our own internal resources in the New Energy business will be Rs 75,000 crore (over $10 billion) in three years".
This component of the three-part plan will see the Jamnagar new energy complex “provide infrastructure and utilities to manufacture ancillary material and equipment needed to support" the Giga factories. Through this, the company also wants to pitch in for “independent manufacturers with right capabilities to be part of this nationwide ecosystem".
The third part of the plan talks about repurposing the significant capacities across businesses and industries that Reliance already has in place to augment its green push. Ambani said that the company will bring the experience of its “engineering, project management and construction capabilities" to bear on the task of executing and delivering “world class, renewable energy solutions".
Towards that end, Reliance will build “two additional divisions to further strengthen this ecosystem", Ambani said. First of those is a dedicated Renewable Energy Project Management and Construction Division that will “provide gigawatt scale end-to-end solutions for large renewable plants across the world". Further, this division will also partner with “thousands of Green MSME Entrepreneurs" who come forward to “deploy kilowatt to megawatt scale solutions in agriculture, industry, residences and transportation".
The second element is a Renewable Energy Project Finance Division that “will provide finance solutions to the stakeholders in our ecosystem". Ambani said that the company “will achieve (its) goals by enabling a platform to source long-term global capital for these investments at the most attractive terms". Reliance will “seek support from relationship banks and global green funds for this purpose" while also enabling “financing for the entire ecosystem of small businesses and entrepreneurs who invest alongside us".
Stating that these plans are firmly in line with the call for Atmanirbhar Bharat given by PM Modi, Ambani said that “these three parts together constitute our architecture for India’s decentralised Green Economy", which is designed to “generate millions of new and high-value job opportunities for our youth" and put “Gujarat and India on world solar and hydrogen map".