Mukesh Ambani has entered the renewable energy sector with an investment of $10 billion. As per the experts, his entry can further lower the tariff of renewable energy. This is because now Adani will get direct competition from Reliance.
The two richest men of India are trying to be the face of Prime Minister Narendra Modi’s Renewable Energy Ambition for India.
Till now both the companies have avoided any direct competition but with the entry of Reliance Industries in the Renewable energy sector, the scenario is going to be different.
Last month Mukesh Ambani announced that he will build 100 GW in solar energy capacity over the next nine years. He said his group would spend $10 billion over the next three years in building solar manufacturing units, a battery factory for energy storage, a fuel cell factory, and a unit to produce green hydrogen.
Just after 3 days of this announcement, Adani announced that his green energy venture will be adding 5 GW every year till 2030, from a current level of about 3.5 GW.
As per the experts, there is enough space for multiple solar companies to work in the Indian Market but tariffs will further go down as now the biggest business player of India will also be bidding for the projects.
It is interesting to note that the Indian solar industry is at the lowest tariff in the world.
“I would expect by 2030 that they (solar tariffs) will probably touch 1 rupee per kilowatt-hour,” said Tim Buckley, director of energy finance studies at the Institute of Energy Economics and Financial Analysis.
We cannot forget the fact that Reliance Industries is also known for disrupting rival businesses- Jio is a real-time example.
Rishab Shrestha, senior analyst at consultancy Wood Mackenzie said he expects India’s coal generation share to drop to 50% in the early 2030s from over 70% currently.
“We expect the cost of building new coal plants in India to be $62/MWh by 2030, 25% higher than that of solar,” Shrestha said.
“Reliance will emerge as the most credible renewables player in the country in the next two years. Its ESG scores will also improve, meaningfully attracting money from ESG funds globally,” Jefferies said in a note.
If both companies hit their targets, Reliance’s targeted solar capacity of 100 GW will be twice as large as Adani’s, and the companies would together account for a third of all of India’s 2030 target.
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