Reliance Industries, led by billionaire Mukesh Ambani, is projected to generate USD 10-15 billion in revenue from its new energy business, including solar and hydrogen, by 2030. However, the company will need to seek acquisitions or partnerships to compensate for its limited technological expertise, according to a report by Sanford C Bernstein.
Reliance Industries’ Ambitious Growth in Solar and Hydrogen
Reliance plans to invest USD 2 trillion in clean energy, primarily in solar, battery, electrolyzers, and fuel cells, in India by 2050. India has set ambitious targets for solar capacity and green hydrogen production. Reliance aims to capture significant portions of these markets. The company is shifting away from fossil fuels and has committed to becoming a net-zero carbon emission company by 2035, surpassing other energy companies in the region.
Reliance is developing a comprehensive renewable energy ecosystem involving solar, batteries, and hydrogen to meet the requirements of India’s green energy revolution. While Reliance possesses the financial resources and industry connections, the report highlights the need for improved technology and manufacturing capabilities for success. Funding is not a concern for Reliance, given its strong financial position and positive cash flow outlook.
The Indian government has set a goal of 500GW of installed renewable energy capacity by 2030, with solar accounting for the largest portion at 280GW. India currently has 65GW of solar power as of February 2023. To accommodate intermittent renewable energy sources such as wind and solar, India is projected to require 88GWh of cumulative energy storage system (ESS) capacity by 2030, representing 7% of the installed solar and wind capacity. By 2050, ESS capacity is expected to reach 15% of the total installed wind and solar capacity. Regarding transportation, the Indian government aims for 30% electric vehicle (EV) sales penetration 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 the lack of charging infrastructure, affordable EV options, and an established battery supply chain.
Reliance’s Projections for Solar, Batteries, and Hydrogen Market Growth
Two-wheelers are expected to see stronger adoption, reaching over 20% by 2030 and 75% by 2040. India has set a target of producing 5 million tonnes of green hydrogen annually by 2030, aiming to replace grey hydrogen derived from gas production in sectors like oil and fertilizers to facilitate decarbonisation. The report estimates that generating 5 million tonnes of green hydrogen would require 81GW of cumulative electrolyser capacity, assuming a 45% load factor and 63% efficiency. Reliance is projected to begin recognizing revenue from its New Energy business in the fiscal year 2025, starting with the operation of solar and battery plants in 2024.
Overall, solar energy is expected to have the largest total addressable market (TAM) of USD 13 billion by 2030, followed by hydrogen at USD 10 billion, and batteries at USD 7 billion. The report estimates that Reliance can achieve USD 8 billion in revenue from solar by 2030. For batteries, Reliance could potentially capture a significant portion of the TAM, starting around 2025, and reach USD 3 billion by 2030. Hydrogen offers even more opportunities, with an estimated USD 2 billion in revenue by 2030. The report predicts that Reliance will install 100GW of solar capacity and achieve a 36% market share in batteries with a capacity of 50GWh by 2030. In terms of hydrogen, Reliance is expected to capture approximately 19% of the market with a cumulative electrolyser capacity of 16GW by 2030, compared to an expected TAM of 81GW.
