Mukesh Ambani is all set to do a ‘Jio’ with green energy

• the second richest man in India, Mukesh Ambanic set the sights on a new ‘green’ path.
• Ambani’s first foray into green energy also puts him in direct clash with Gautam Adanicurrently the fourth richest man in the world.
• Analysts expect the green energy sector to be the new growth engine for Reliance Industries.

India’s second richest man Mukesh Ambania poised to disrupt another industry – green energy. And, doing what he initially did with telecom, making it affordable.

“Just as India has the most affordable wireless broadband in the world today, within this decade we will have the most affordable green energy in the world,” to trust Industries’ chairman Mukesh Ambani said.

Essentially, Ambani wants to draw a Jio with green energy – and India’s richest man, Gautam Adani, should be concerned as green energy is also one of his primary activities.

A refined reset – setting the tone for a ‘green future’

Reliance Industries’ refining business is the main driver of the oil-to-digital conglomerate, and now Ambani plans to revamp it for a green future.

Polysilicon is an important raw material in the photovoltaic supply chain – solar panels in simpler words. Unlike Adani, Ambani has the added benefit of Reliance Industries’ massive facility in Jamnagar, from which it can source up to 90 kilotons of polysilicon – a key feedstock in the photovoltaic supply chain.

It is estimated that about 5 tons of polysilicon is needed to produce 1 megawatt solar panels. The 20 GW target would require about 1 lakh ton of polysilicon, and RIL has already secured 90% of that supply.

In pursuit of its green energy goals, Reliance has already partnered with several global players, including Ambri in the US, Faradion in the UK and Lithium Werks in the Netherlands, each offering expertise in energy storage.

In addition, Reliance is also looking at a piece of the pie in the green hydrogen space, partnering with US-based Chart Industries to commercialize hydrogen technology and build a supply chain. It is also collaborating with Danish Stiesdal A/S on its next-gen electrolyser technology to reduce the cost of producing hydrogen from water.

Green energy will be the new growth engine: UBS

Reliance invested $10 billion in its green energy efforts last year. Analysts at UBS estimate capex at another $26 billion by the end of the decade. Of course, this is nothing compared to the huge $20 trillion opportunity presented by the new energy sector.

UBS estimates Reliance’s green energy investments could add $35 billion in value to the company. If we discount this to the present day, it works out to 234 per share. The report also says that green energy will be RIL’s new growth engine in the future.

While the domestic renewable energy market itself represents a huge opportunity for many large conglomerates, the RIL chairman’s ambitions extend beyond India.

“Within this decade we will have the most affordable green energy in the world. And these solutions will then be exported to other countries, enabling them to reduce CO2 emissions,” said Ambani.

For Ambani, the volume game makes the most sense, especially in a country like India. Since green energy is the future, it’s an obvious choice for India’s second richest man to dive in.

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