Bringing Home The Sun
Business Today|December 12, 2021
Mukesh Ambani and Gautam Adani pump in the big bucks, pushing India’s scattered renewable energy industry to the next level, and hyper-fuelling the country’s clean energy dreams for 2030. Nuance: India’s two richest businessmen are on the same page
Krishna Gopalan

The headline of this story could well have been “The Great Disruptors”. But even that would probably not have fully conveyed the extent of the tectonic shift that two canny industrialists have seeded within months of each other. They have not partnered. They probably won’t compete directly either. Yet, the impact of their moves could serve to spark long-term change in an area of national and global interest—renewable energy as a source of electric power, with attendant benefits for our planet’s environmental health. The two gentlemen in question—Mukesh Ambani and Gautam Adani, two of India’s richest men, both ambitious to the point of leaving you incredulous—can sniff out a business opportunity years ahead of the curve. Co-relate the two aspects, and it would appear that renewable energy’s time has truly come. It is good for the planet. It is good for business. And now, it is good business.

On June 24, addressing Reliance Industries shareholders at the company’s annual general meeting, now a regular jamboree of big announcements, Ambani made public a plan to invest ₹60,000 crore to set up four giga factories, which “will manufacture and fully integrate all the critical components of the new energy ecosystem”. In some detail, the plan is to make solar photovoltaic modules, advanced energy storage batteries, electrolysers and, finally, fuel cells. The investment, he said, “will create and offer a fully integrated, end-to-end renewable energy ecosystem”. Another ₹15,000 crore is to be invested in the value chain, partnerships and future technologies. That adds up to ₹75,000-crore ($10-billion) investments in the new energy business over three years. Ambani further said that Reliance will “establish and enable at least 100 GW of solar energy by 2030”.

Ambani $10 billion

OF IT, $8 BN: FOUR GIGAFACTORIES, STORAGE OF INTERMITTENT ENERGY, PRODUCTION OF GREEN HYDROGEN, FUEL CELL FACTORY

THE BALANCE $2BN, FOR VALUE CHAIN, PARTNERSHIPS AND FUTURE TECH, INCLUDING UPSTREAM AND DOWNSTREAM INDUSTRIES

Adani $20 billion

PRIMARILY INTO POWER GENERATION BUSINESS OF SOLAR, WIND. A SMALL PART IS EXPECTED TO GO INTO HYDROGEN POWER

In a late-night statement on November 19, Reliance said the proposed investment to be made by Saudi Arabia’s Aramco in its O2C (oil-to-chemicals) business would be re-evaluated. Importantly, this has been attributed to the “evolving nature of Reliance’s business portfolio”. The deal, announced over two years ago, envisaged Aramco picking up a 20 per cent stake in the O2C business of Reliance.

The statement also makes a mention of Jamnagar, now the base for a major part of the O2C assets, as the centre for “Reliance’s new businesses of renewable energy and new materials, supporting the net-zero commitment”. The thrust on renewable energy, with this announcement, is a clear indication of a new strategy within Reliance.

Meanwhile, on September 21—three months after the Reliance AGM—Gautam Adani addressed the JP Morgan India Investor Summit and declared that his group would invest $20 billion in renewable energy generation, component manufacturing, transmission and distribution over the next decade, embellishing an already significant body of work done by the Adani Group in the past few years. With a portfolio of 25 GW (including operational and in-the-pipeline projects), Adani said this investment “puts us well on track to be the world’s largest renewable power generating company by 2030”. The billionaire went on to point out that of the group’s current EBITDA from utilities, 43 per cent comes from the green business. “Our actions clearly indicate that we are putting our money where our mouth is: Over 75 per cent of our planned capex until 2025 will be in green technologies,” Adani said.

The duo’s proposed cumulative investment of $30 billion (a mammoth ₹2.23 lakh crore) will shake up the 15-year-old renewable energy ecosystem in India, and will go across every form of renewable energy, be it solar, wind, hybrid or even hydrogen. Their paths, however, look different. Ambani’s use of the world “enable” is leading most people to interpret that part of his grand plan is to be a key equipment supplier. On the other hand, Adani is already into power generation, transmission and distribution, and will continue on that path, adding more parts to the whole on the way.

Two months after Adani’s talk, this November, India announced at the 26th United Nations Climate Change conference (better known as COP26) that it would put in place 500 GW of non-fossil energy capacity by 2030 (we have 148 GW as of September 2021). The estimated investment needed (see India’s Hard Drive) is $260 billion or ₹18 lakh crore, about nine times what Ambani and Adani have collectively announced. That huge gap presents a once-in-a-lifetime opportunity for others— the government and the private sector. “We see India’s renewable energy opportunity to be more than 750 GW over the next two decades,” says Rahul Goswami, Managing Director, Greenstone Advisors, an advisory firm with a focus on renewable energy.

Ambani and Adani have obviously seen this opportunity. Neither of the two groups responded to detailed questionnaires from Business Today.

AMBITION OR AUDACITY?

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM BUSINESS TODAYView All

How The Arranged Marriage Between Zee And Sony Could Pan Out?

Circumstances broker a coupling of Zee and Sony, two companies with distinctly different cultures and strengths. As they unite for a new future, they still face several hurdles, including an upset Invesco, Zee’s largest investor, and their own contradictions. The real challenge for the new mates has only just begun

10 mins read
Business Today
January 23, 2022

Will GDP Growth Result In A V, W Or K- Shaped Recovery?

Is it a V? Is it a K? L? U? W? The pattern of india’s economic recovery has got india’s top economists seized in a bizarre game of alphabet economics. Meanwhile, there’s another shape that’s threatening to put the recovery into an ‘o’ loop. It’s called omicron, and it could be a nasty customer

9 mins read
Business Today
January 23, 2022

Should You Invest Overseas?

Many broking firms are facilitating investments in International markets. Here’s the low down on the challenges and risks

7 mins read
Business Today
January 23, 2022

Are We Headed For A BNPL Trap?

There’s a new genie in town. It’s called buy now, pay later, and it promises to deliver all you need through quick, very short-term, interest-free loans. But this genie comes with significant risks—hidden costs, new to credit population with no credit bureau records, lack of financial literacy in smaller towns, and regulatory gaps. BNPL’s value proposition is undeniable, but so is the spectre of consumers getting sucked into uncontrolled spending, and spiralling debt

10+ mins read
Business Today
January 23, 2022

‘I'M NOT EMOTIONAL ABOUT MY BUSINESSES'

Ajay Piramal, Chairman of the Piramal Group, talks at length about his plans for the financial services business, succession and retirement

10+ mins read
Business Today
January 23, 2022

THE SCENT OF ME

Welcome to the world of bespoke perfumes, the ultimate in luxury

5 mins read
Business Today
January 23, 2022

‘Always have a people-first approach'

The Best Advice I Ever Got - NEVIL PATEL DIRECTOR ORPAT GROUP

1 min read
Business Today
January 23, 2022

OUT OF THE BOX

For a CEO, Divya Jain uses the most uncommon tool for meditation and focus: she throws punches, literally

2 mins read
Business Today
January 23, 2022

APPLE'S INDIA

AFTER YEARS OF LANGUISHING ON THE FRINGES, APPLE HAS FINALLY MADE ITS PRESENCE FELT IN INDIA WITH RECORD SALES AND MARKET SHARE OVER THE PAST TWO YEARS. BUT HAS ITS WINNING STRATEGY TO EFFECT THE TURNAROUND SET IT UP WELL TO MINT FURTHER GAINS?

10+ mins read
Business Today
January 23, 2022

A BREATH OF PURIFIED AIR

Allabout Innovations is aggressively expanding production of its anti-viral air purification device, developed in the coastal town of Alappuzha in Kerala, to meet global demand

7 mins read
Business Today
January 23, 2022