Reliance Industries earns a place in the sun with global solar play

100 GW by 2030 is more than twice the existing renewable capacity of any company in the world

Reliance Industries Ltd's (RIL) mega plan for 100 GW of greenfield solar capacity by 2030 will be more than two times the existing renewable capacity of any company in the world. Italy-based Enel spa has the world’s largest renewable power generation capacity of 48.6 GW at present.

The Enel group, an energy sector utility operating in around 30 countries, is of course targeting 120 GW capacity by 2030. Its fully-owned subsidiary Enel Green Power manages 49 GW of the renewable energy portfolio of the group.

Next in the pecking order is China Energy Investment Corp (China Energy) which was established in 2017, following the merger of China Guodian Corporation and Shenhua Group. It operates eight business segments, including coal, thermal power, new energy, hydropower, transportation, coal chemicals, environmental technology and industrial finance. The company’s website states that it is the world’s largest producer of coal, thermal power, wind power, as well as coal-to-liquids and coal chemical products. 

Though RIL has not given a break-up of its investments in solar gear manufacturing, actual generation and construction, it wants to enter project management, construction, and even financing for renewable energy projects. “Reliance will establish and enable at least 100 GW of solar energy by 2030. A significant part of this will come from rooftop solar and decentralised solar installations in villages,” RIL chairman and managing director Mukesh Ambani said at the company’s annual general meeting, implying that the entire 100 GW capacity would not be owned by it alone.

Solar rooftops and distributed energy systems, however, do not give the mega scale that ground-mounted solar installations ensure. Nonetheless, these installations require huge tracts of land which would increasingly become difficult for solar power generators.

Renewable play in the European countries is more wind power coupled with hydropower and geothermal. India, like other Asian countries and Africa, has good potential for solar power generation due to the radiation level. After the initial push to wind power, India has solar and wind installed capacity of about 40 GW, each. After adding 46.3 GW of big hydropower generation capacity, the total renewable capacity at present is 141 GW. Given that the country has set a target of 450 GW of renewables by 2030, RIL’s share in that will be 22 per cent.

In the domestic market, RIL’s competitor in the solar business will be the Adani group and the Tatas, apart from the government-owned NTPC. But their capacity is insignificant compared to RIL’s ambition. While Tata Power is targeting 25 GW by 2030, Adani Green wants to reach that number by next year since it already has projects in hand. NTPC, which is currently playing a crucial role in the bundling of coal and green power, would expand three times its existing installed capacity of 1 GW to reach 30 GW by 2030.

All the three competitors are major thermal power generators in the country though Tata Power and NTPC have already announced that they will not put up fresh coal-based generation capacity.

Ambani on Thursday laid out global ambitions for RIL’s new energy business. It would include building an integrated solar PV module factory, advanced energy storage battery factory, electrolyser factory, and fuel cell factory with an investment of Rs 60,000 crore over the next three years. In addition, the company intends to spend another Rs 15,000 crore to support ancillary infrastructure for these factories.

RIL could benefit from the production linked incentive (PLI) scheme that the government has rolled out for PV manufacturing and advanced energy storage plants. According to a report of HSBC Global Research, the move in the near term is likely to reduce the overhang of oil-related products on ESG ratings on the company as investors see it firmly moving towards green energy. The report, however, said given the rapid development in technology and sharply falling costs, it foresees tight margins for the company.