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

• India’s second richest man, Mukesh Ambani is setting sights on a new ‘green’ path.
• Ambani’s head-first foray into green energy also sets him on a direct clash with Gautam Adani, currently the fourth richest man in the world.
• Analysts expect the green energy business to be the new growth driver for Reliance Industries.

India’s second richest man Mukesh Ambani is all set to disrupt another industry – green energy. And, do what he initially did to telecom, make it affordable.

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

Essentially, Ambani wants to pull a Jio with green energy – and India’s richest man, Gautam Adani, should be worried, since green energy is also one of his primary businesses.
A refining reset – setting the tone for a ‘green future’
Reliance Industries’ crude oil refining business is the bellwether of the oil-to-digital conglomerate, and now Ambani has set out to revamp it for a green future.

Polysilicon is a key raw material in the photovoltaic supply chain – solar panels in simpler words. Unlike Adani, Ambani has the added advantage of Reliance Industries’ massive facility in Jamnagar, from where he can source up to 90 kilo-tonne of polysilicon – a key raw material in the photovoltaic supply chain.

According to estimates, about 5 tonnes of polysilicon is needed to manufacture 1-megawatt worth solar modules. The 20 GW target would need about 1 lakh tonnes of polysilicon, and RIL already has 90% of that supply secure.

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

In addition to this, Reliance is also eyeing a piece of the pie in the green hydrogen space, teaming up with the US-based Chart Industries to commercialize hydrogen technology and set up a supply chain. It has also partnered with Denmark’s Stiesdal A/S for its next-gen electrolyser technology to reduce the cost of producing hydrogen from water.
Green energy will be the new growth engine: UBS
Reliance has committed $10 billion capex towards its green energy efforts last year. Analysts at UBS estimate capex of another $26 billion by the end of this decade. This of course is nothing compared to the massive $20 trillion opportunity that the new energy sector presents.

UBS estimates that Reliance’s green energy investments could add $35 billion value to the company. Discounting this to the current day, it translates to ₹234 per share. The report also says green energy will be the new growth engine of RIL going forward.

While the domestic renewable energy market is itself a massive opportunity for many large conglomerates, the RIL chairman’s ambitions go beyond India.

“We will have the world's most affordable green energy within this decade. And these solutions will then be exported to other countries, helping them contain carbon emissions,” said Ambani.

For Ambani, the volume play makes the most sense, especially in a country like India. With green energy being the future, diving head-first into this is an obvious choice for India’s second richest man.

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