According to a report by Sanford C Bernstein, Mukesh Ambani’s Reliance Industries, a billionaire, may earn USD 10-15 billion by 2030 from its new energy business encompassing solar and hydrogen. However, the company will need acquisitions or partnerships to compensate for its limited expertise in technology.
Reliance sees clean energy, including solar, battery, electrolyzers, and fuel cells, as a significant growth opportunity, with a projected investment of USD 2 trillion in India until 2050. India has set targets of achieving 280GW of solar capacity and producing 5 million tonnes of green hydrogen by 2030.
The report states that EV (electric vehicle) penetration is expected to reach 5% for passenger and commercial vehicles and 21% for two-wheelers. Clean energy could have a total addressable market (TAM) of USD 30 billion in 2030, compared to the current USD 10 billion. By 2050, the TAM is estimated to reach USD 200 billion, with a cumulative spending of USD 2 trillion.
Reliance, an oil-to-telecom conglomerate, has already announced its expansion into solar manufacturing and hydrogen as part of its shift away from fossil fuels. The company aims to achieve 100GW of installed solar capacity by 2030, which accounts for 35% of India’s targeted capacity.
Bernstein predicts that by 2030, Reliance could capture 60%, 30%, and 20% of the solar, battery, and hydrogen TAM, respectively. They estimate that Reliance could generate around USD 10-15 billion in revenue from its new energy business in 2030, representing approximately 40% of the TAM.
Reliance is actively building a green energy business to supply the required equipment for India’s green energy revolution. The company has committed to becoming a net-zero carbon emission company by 2035, ahead of other energy companies in the region. Reliance is constructing a fully integrated renewables energy ecosystem that includes solar, batteries, and hydrogen.
Despite having strong financial resources and relationships, Reliance lacks the necessary technology and manufacturing expertise, which the report considers essential for success.
Funding is not a concern for Reliance, given its current balance sheet and projected free cash flow.
The Indian government has set a target of installing 500GW of renewable energy by 2030, with solar accounting for the largest share at 280GW. As of February 2023, India had 65GW of solar power installed.
To accommodate intermittent renewable energy sources like wind and solar, India is estimated to require 88GWh of cumulative energy storage system (ESS) capacity by 2030, which represents 7% of installed solar and wind capacity. By 2050, the ESS capacity is expected to reach 15% of the total installed wind and solar capacity.
Regarding transportation, the Indian government aims for EV sales penetration of 30% for private cars, 70% for commercial vehicles, and 80% for two and three-wheelers by 2030. However, the report suggests that achieving these targets may take longer due to challenges such as the lack of charging infrastructure, affordable EV options, and an established battery supply chain. The adoption of EVs is projected to be stronger for two-wheelers, reaching over 20% by 2030 and 75% by 2040.
India has also set a target of producing 5 million tonnes of annual green hydrogen by 2030. The report estimates that 81GW of cumulative electrolyzer capacity will be needed to generate this amount of green hydrogen, assuming a 45% load factor and 63% efficiency. Green hydrogen is intended to replace grey hydrogen, which is produced using gas, in sectors such as oil and fertilisers.
