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Four deals in three days: RIL's clean-energy roadmap

The conglomerate is reimagining its energy business, pursuing ambitious targets in solar-power and green-hydrogen verticals

October 13, 2021 / 08:12 PM IST
At the June AGM, RIL's CMD Mukesh Ambani had unveiled the group's new-energy business' vision and strategy

At the June AGM, RIL's CMD Mukesh Ambani had unveiled the group's new-energy business' vision and strategy

Since October 10, Reliance Industries (RIL) through its wholly-owned subsidiary Reliance New Energy Solar (RNESL), has made an acquisition and a strategic investment, and formed two partnerships as it presses ahead with its clean-energy ambitions.

The direction largely has been towards acquiring or gaining access to cutting-edge technology that can reduce the cost of renewable-energy production, especially in solar-energy generation.

What is the new-energy pivot?

Last year, RIL had unveiled a plan with its shareholders to build its new energy and new materials business.

At its June annual general meeting, the conglomerate’s chairman and managing director (CMD) Mukesh Ambani recalled that and outlined RIL’s plan for their new energy business, which included integration of scientific and technological breakthroughs, and building a business that makes the best of the rise in demand for clean energy and fall in cost of production.

In line with this, the CMD announced plans to invest Rs 75,000 crore (Rs $10 billion) over the next three years in renewable energy, including the setting up of gigafactories in Jamnagar, Gujarat; Jamanagar is from where RIL’s old-energy business was launched and it will be from where its new-energy business will be too. Located in a 5,000-acre, integrated complex called Dhirubhai Ambani Green Energy Giga Complex, these gigafactories will produce photovoltaic modules, advanced energy storage batteries, electrolysers to make green hydrogen, and fuel-cells to convert hydrogen into motive and stationery power. The complex will also have infrastructure to manufacture ancillary products.

After this announcement, brokerage firm Bernstein estimated that RIL may have a $36-billion clean-energy business in the next five years.

What are the buyouts and partnerships so far?

RNESL started small, though it started soon after its incorporation in June. It announced an investment of $50 million in Ambri, which makes long-duration batteries,in August. The RIL unit was among many other investors but the funding gave it access to Ambri’s technology to make batteries that can store electricity up to 10 hours (a considerable improvement over lithium-ion batteries) and that can be managed with minimal maintenance under trying climatic conditions.

After two months, RNESL was back in the market but this time to make a much bigger investment. It bought out the Norway-headquartered REC Solar for $771 million, which is highly focussed on research and development (R&D) in solar-power generation and has 446 patents to its name. The same day, RNESL announced another big bet in solar, by sharing a plan to buy a 40% stake in Sterling and Wilson Solar (SWSL). SWSL, an engineering, procurement and construction (EPC) solutions provider for solar projects, has a global portfolio with a total capacity of 11.4 GWp, including  the world’s largest single-location power plant in Abu Dhabi.

Over the next few days, RNESL announced a partnership with Germany’s NexWafe GmbH to further RIL’s solar ambitions and another partnership with Denmark’s Stiesdal to advance its green-hydrogen plans. Both tie-ups have brought home technologies that could lower the cost of renewable-energy production and drive its larger adoption.

But what are these gamechanging technologies?

The trouble with renewable-energy sources is that they can’t be relied on to give a steady supply of power. That’s where Ambri’s long-storage batteries come in. These batteries can store the clean energy and be rigged to traditional power grids, to ensure that there are no disruptions in supply. Their batteries are made from low-cost materials and its production involves fewer steps, which again cuts down cost of production. They can also be transported with minimal fuss and can survive rough handling, not given to thermal runaway which can cause fires or electrolyte decomposition which can lead to lower battery life.

REC Solar brings with it its heterojunction technology or HJT, which makes PV cells that make solar modules more efficient, durable and long-lasting. Its Alpha series, with a temperature coefficient of 0.26% per degree Celsius, is perfect for country's with higher temperatures. Temperature coefficients measure the drop in efficiency of solar panels with every degree rise in temperature and the industry average is around 0.3% to 0.5%.

So far, Passivated Emitter and Rear Cell (PERC) technology has been widely used in PV cell production but HJT is the next frontier, but it isn’t easy to switch because it entails higher capital. Thankfully, REC Solar is now in RIL’s stable.

The partnerships with NexWafe and Stiesdal will help RNESL will bring down cost of solar-energy generation and green-hydrogen production. NexWafe makes what are known as ‘green silicon wafers’, which are used to make semiconductors and solar cells. These wafers are ultra-thin, deliver higher efficiency and are made directly from the raw materials without the expensive intermediate steps, a process which brings down Co2 emissions by 70% and costs by 30%. On the other hand, Stiesdal’s HydroGen electrolysers are low-cost, which help because electrolysers are the biggest expense in green-hydrogen production.

Moneycontrol News
first published: Oct 13, 2021 08:12 pm

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