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Reliance plans to invest $75 billion to make India a hydrogen hub

India could become a clean-hydrogen juggernaut thanks to billionaire Mukesh Ambani’s ambitious plan to transition his firm Reliance Industries Ltd. toward green energy.

Mukesh Ambani, Chairman and Managing Director of Reliance Industries

Courtesy: Francis Mascarenhas

Ambani, Asia’s richest man, stated earlier this month that he plans to invest $75 billion towards renewable infrastructure, which includes generation plants, electrolyzers, and solar panels. There is increasing speculation that the initiative involves converting all of that renewable energy into hydrogen, which would be one of the most significant investments in the next-generation fuel.

According to analysts, Reliance is likely to choose hydrogen in order to sidestep India’s wholesale electricity sector, which is governed by financially strapped utilities and plagued by overdue payments. Gagan Sidhu, director at the Centre for Energy Finance at CEEW said, “Reliance is preparing itself to capture the entire value chain of the green hydrogen economy. They clearly have seen the writing on the wall.”

Green hydrogen, which is produced from water and clean electricity, is regarded as important to the world’s emissions reduction aspirations since it will assist consumers and major industries such as steel in transitioning to lower-carbon fuels. Prime Minister Narendra Modi stated last year that India, the world’s third-largest emitter of greenhouse gases and a major energy importer, will become a global center for fuel production and export.

While Reliance hasn’t indicated how much of the capital will go toward hydrogen, the $75 billion investment in clean energy is by far the largest in the country. Other corporations, including Adani Enterprises Ltd. and state-owned energy giants NTPC Ltd. and Indian Oil Corp., have plans for green hydrogen as well.

According to reports, the number of countries having a hydrogen strategy more than doubled last year to 26 and projected plans from the United States, Brazil, India, and China could overhaul the global market. However, the industry is still in its early stages and is far from economically viable. India is looking to its billionaires, such as Ambani and his competitor Gautam Adani, to lead the way.

The potential to make it at a reasonable cost will be a real challenge. Green hydrogen generated by renewables is not competitive with traditional fuels, costing roughly twice as much as coal, India’s primary source of electricity generation. Ambani has promised to produce green hydrogen for $1 per kilogram, a more than 60 percent decrease from current pricing. Ambani stated last year, “Reliance will aggressively pursue this target and achieve it well before the turn of this decade.”

To get to a $1 price point, the cost of electrolyzers, the equipment needed to produce green hydrogen, will have to drop significantly. Furthermore, the capacity utilization of more than 80 percent will be required, and this should be powered by consistent energy supplies costing less than 3 cents per kilowatt-hour. To obtain round-the-clock supplies, additional energy resources such as storage or hydropower will be required, which may drive up the cost above the desired level.

Reliance, which targets to be net-zero by 2035, said it expects to produce 100 gigatonnes of renewable energy by the end of the decade, accounting for one-fifth of the country’s non-fossil capacity ambition. The company stated that it is looking at sites in Gujarat and has proposed 450,000 acres from the state government in Kutch, a white-sand desert on India’s western coast and a preferred spot for renewable energy in the country.

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