- Saturday, November 23, 2024
By: Shubham Ghosh
INDIAN business tycoon Mukesh Ambani’s entry into renewable energy worth $10 billion could see solar tariffs driving to the ground further and ignite bidding wars with fellow Indian billionaire Gautam Adani, industry analysts have predicted.
According to a report by Reuters, two of India’s richest men are striving hard to be at the forefront of Indian prime minister Narendra Modi’s ambition to ramp up green energy capacity in the country to 450 gigawatts (GW) by 2030.
The two tycoons have mostly avoided operation in each other’s space but the energy push by Ambani’s Reliance Industries and the Adani group of companies will be the highest profile faceoff between them, the report added.
While Ambani built up the family business of petrochemicals and textiles into a sprawling empire including telecoms and retail, Adani is more of a self-made billionaire whose focus has been on electricity generation, transmission and distribution and running of ports and airports.
Both Ambani and Adani hail from the western Indian state of Gujarat, which is also the home state of Modi.
In June, Ambani announced his plan to build 100 GW in solar-energy capacity over the next nine years. He unveiled that his group would spend $10 billion over the next three years in building solar-manufacturing units, a battery factory for energy storage, a unit to produce green hydrogen, etc.
Days later, Adani said his green energy venture would add 5 GW every year this decade, from a current level of 3.5 GW, preparing the base for an intense competition in the days to come.
Fierce competition in India’s green energy space
As per experts, there is a wide space for several companies to grow as part of India’s ambitious renewable energy target, but tariffs could come down further as competitive companies try to outsmart each other in aggressive bidding wars to bag projects.
In India, solar tariffs are already among the lowest in the world, having gone down below Rs 2 ($0.027) per kilowatt hour in auctions held in Gujarat.
“I would expect by 2030 that they (solar tariffs) will probably touch 1 rupee ($0.013) per kilowatt hour,” Tim Buckley, director of energy finance studies at the Institute of Energy Economics and Financial Analysis, was quoted as saying by Reuters.
Reliance is known for disrupting rival businesses. For example, its telecom venture Jio has dethroned market leaders like Vodafone Idea and Bharti Airtel to become the largest telecom operator in India by using cheap smartphones and data plans.
