Reliance Industries bets big on green energy

© Provided by The Financial Express
RIL has already begun work on developing the Rs 60,000-crore Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, which will include manufacturing units for solar cells and modules, a battery unit for energy storage, a fuel cell-making factory and an electrolyser plant to produce green hydrogen.

Stating that Reliance Industries (RIL) “will aggressively pursue” the target of bringing down the cost of green hydrogen to under $2 per kg “well before the turn of this decade”, chairman Mukesh Ambani said on Friday “India can set an even more aggressive target of achieving under $1 per kg within a decade”.

Currently, the production cost of green hydrogen is around $3.6-5.8/kg, according to a report by Council on Energy, Environment and Water. The planned reduction in production cost of the benign source of energy could help the country cut its burdensome oil import bill and have a salutary effect on the current account.

“The rapid fall in the cost of production has made solar energy highly competitive, attracting large-scale investments,” Ambani said, addressing the International Climate Summit organised by the PHD Chamber of Commerce and Industry. “This shall play a key role in ensuring similar growth trends in green hydrogen-the future replacement of fossil fuels,” he added.

RIL – which plans to become ‘net carbon-zero’ by 2035 – had unveiled a mega plan for green and clean energy business in June, saying it would make initial investments of Rs 75,000 crore out of its internal resources in the burgeoning area over the next three years.

Prime Minister Narendra Modi, on August 15, had announced the National Hydrogen Mission as the government explores ways to reduce dependence on imported products such as crude oil and natural gas.

RIL has already begun work on developing the Rs 60,000-crore Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, which will include manufacturing units for solar cells and modules, a battery unit for energy storage, a fuel cell-making factory and an electrolyser plant to produce green hydrogen.

Hydrogen produced with the help of electrolysers through electricity generated from renewable sources such as solar and wind plants is called green hydrogen.

Analysts at Bernstein have estimated that RIL will build a 2.5 gigawatt (GW) electrolyser manufacturing capacity, entailing capital expenditure of around Rs 3,700 crore. The electrolyser gigafactory will manufacture modular electrolysers for captive production of green hydrogen for domestic use as well as global sale. “The innovations in dispatchable and low-cost renewable power, the dependence on imported gas create perfect conditions for India to switch to green hydrogen,” Vishal Mehta, MD and partner at Boston Consulting Group, said.

The country currently consumes about around 6 million tonne of hydrogen annually and the government is looking for ways to increase the penetration of domestic green hydrogen in industries which otherwise import natural gas and ammonia to produce hydrogen. The ministry of new and renewable energy has already circulated the draft ‘National Hydrogen Energy Mission’ document for inter-ministerial consultation, aiming to create a hydrogen value-chain in the country and bring down the costs of hydrogen production.

State-run Indian Oil recently said it will build the nation’s first green hydrogen plant at its Mathura refinery, using electricity from its wind power project in Rajasthan. NTPC also plans to produce green hydrogen on a commercial scale from part of the electricity generated by the solar panels to be installed in its upcoming 4,750 megawatt renewable energy park at Rann of Kutch. Currently, the power generator is running a pilot project in its Vindhyanchal unit, where the cost of hydrogen is estimated to be around $2.8-3/kg, which is expected to fall going forward through economies of scale.

JSW Energy said in July its subsidiary JSW Future Energy has entered into a framework agreement with Australian Fortescue Future Industries to collaborate on green hydrogen production. US-headquartered renewable energy start-up Ohmium International has also recently launched a green hydrogen electrolyser gigafactory in Bengaluru.