India’s Reliance says new energy to be as profitable as oil to chemicals in 5-7 years

Indian conglomerate Reliance Industries expects its new energy business to be as profitable as its mainstay oil-to-chemicals segment over the next 5-7 years, Chairman Mukesh Ambani said at a shareholder meeting on Thursday.

The company’s new energy business consists of solar photovoltaic and fuel cell manufacturing, energy storage and green hydrogen production, among others.

“I foresee it becoming as big and profitable over the next 5-7 years, as our O2C (oil-to-chemicals) business, which we had built over the past 40 years,” Ambani said.

Analysts had been waiting for an outlook for Reliance’s new energy business, which has seen heavy investments.

Reliance Industries operates the world’s biggest refining complex at Jamnagar in western India. The complex houses two refineries with a combined capacity of about 1.4 million barrels per day and is at the core of its oil-to-chemicals operations.

The oil-to-chemicals business contributes two-thirds of the Reliance’s overall revenue, making it a key profit driver, despite the conglomerate’s aggressive expansion into retail, telecom and green energy.

In 2021, Reliance Industries announced $10 billion of investments to develop its green energy portfolio and achieve its 2035 net zero carbon goal.

On Thursday, Ambani said Reliance is on track to make the planned investments.

By the end of this year, the company will commence the production of its solar photo-voltaic modules and will complete the first phase of integrated solar production facilities in the following quarters, Ambani said.

The group has leased arid wasteland in Gujarat state to generate about 150 billion units of electricity in the next 10 years, about 10% of India’s energy requirements, Ambani said.

It is also building transmission infrastructure to bring online solar generation projects in a phased manner from 2026, he said.

Ambani said the company has secured land at Kandla port, next to its marine infrastructure at Jamnagar, for the production, storage and shipping of green fuels to local and global markets.

($1 = 83.8630 Indian rupees)