Reliance Industries, operator of the world’s biggest refining complex at Jamnagar in western India, will invest $10.1 billion in clean energy over three years in a pursuit to become a net carbon zero company by 2035.
Reliance’s plan mirrors strategies of global oil majors such as Royal Dutch Shell Plc and BP Plc that have set a goal to become net-zero carbon by 2050 amid pressure from investors and climate activists.
“The world is entering a new energy era, which is going to be highly disruptive. The age of fossil fuels, which powered economic growth globally for nearly three centuries, cannot continue much longer,” Chairman Mukesh Ambani, Asia’s richest man, said at a shareholder meeting on June 24.
The oil-to-telecoms conglomerate will invest 600 billion rupees to build four ‘giga factories’ at Jamnagar for production of solar cells and module, energy storage batteries, fuel cells and green hydrogen, Ambani said.
It will also invest 150 billion rupees in value chain and other partnerships relating to its new renewable energy business, he said, adding a transformation of legacy business into sustainable and net zero carbon business will provide growing returns over several decades.
Reliance will also build solar capacities of at least 100 gigawatts (GW) by 2030, accounting for over a fifth of India’s target of installing 450 GW by the end of this decade.
“A significant part of this will come from rooftop solar and decentralized solar installations in villages,” Ambani said, adding his group will also tap green funds and banks to meet its goal.
“We will achieve our goals by enabling a platform to source long-term global capital for these investments at the most attractive terms,” he said.
Reliance’s entry into the renewable energy business in India will put it in competition with companies such as Adani Green Energy Ltd. and Goldman Sachs-backed ReNew Power.
India currently imports over four-fifths of its solar cell and module requirements from China. Reliance will construct an integrated solar photovoltaic factory to produce ingots and wafers, which would be used to make low-cost solar cells and modules, Ambani said.
The company plans to use green hydrogen and carbon dioxide as raw materials to produce green chemicals, green fertilizers and e-fuels, he said.
Separately Ambani said he hopes to formalize partnerships with Saudi Aramco this year for a 20% stake sale in its oil-to-chemical business, and announced the induction of Aramco chairman Yasir Al-Rumayyan as an independent director on Reliance's board, signaling the strength of the ties between the two companies.
“His joining our Board is also the beginning of internationalization of Reliance. You will hear more about our international plans in the times to come,” he said. (US$1 = 74.1370 Indian rupees)
U.S. oil rigs fell by one to 491 this week, while gas rigs rose four to 113, their highest since January 2020, according to the closely followed Baker Hughes report.
"This award reiterates GATE's position as the global leader in the energy transition,” Karthik Annadorai, executive vice president of GATE Energy, said.
The investment bank said key oil products markets are showing "steep backwardation and inventories that have fallen to low levels."