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Reliance New Energy Solar acquires REC Solar Holdings for $771 million – Moneycontrol

At the June AGM, RIL’s CMD Mukesh Ambani had unveiled the group’s new-energy business’ vision and strategy

Reliance New Energy Solar on October 10 said it acquired REC Solar Holdings for $771 million.

“Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of Reliance Industries Ltd (RIL), has announced acquisition of 100 percent shareholding of REC Solar Holdings AS (REC Group) from China National Bluestar (Group) Co Ltd., for an Enterprise Value of USD 771 million,” Reliance New Energy Solar said in a BSE filing.

The acquisition is key to RIL’s new-energy vision to become a global-scale photovoltaic (PV) manufacturing player, with access to heterojunction technology (HJT).  This also takes the conglomerate one step closer to its goal of generating or enabling generation of 100GW of solar energy by 2030, in line with India’s goal to produce 450GW of renewable energy by the same year.

Norway-headquartered REC, founded in 1996, has its operational headquarters in Singapore and regional hubs in North America, Europe, Australia and Asia Pacific.  The company, with over 600 utility and design patents of which 446 have been granted and the balance is under evaluation, has always focussed on research and development. RIL plans to use REC Solar’s industry-leading technology in its silicon-to-PV-panel gigafactory in the Dhirubhai Ambani Green Energy Giga Complex, in Jamnagar, starting with 4GW per annum capacity and growing to 10GW per annum capacity over time.

REC Solar has 5,000 MW of installed capacity in the Indian subcontinent and its solar panels have been subject to rigorous testing in India by third parties, and the panels clocked an average of 0.68% degradation in 3.8 years. REC’s website claims that its roof-mounted panels can last for at least 25 years.

Its Alpha Series, with a temperature coefficient of 0.26% per degree Celsius, is perfect for country’s with higher temperatures. Temperature coefficients measure the drop in efficiency of solar panels with every degree rise in temperature and the industry average is around 0.3% to 0.5%

Reliance New Energy Solar had earlier, this August, had made another investment in a technology suited for Indian climate. It had invested, along with Paulson & Co, Bill Gates and other investors, $144 million in Ambri. Ambri has patented technology for long-duration energy storage systems, which can be linked to the power grid with minimal maintenance and with the capability to survive a range of climatic conditions.

With its advanced interconnection technology and patented design, REC Solar’s panel is apt for commercial and industrial rooftop segment and ground-mount installations with space restrictions. This will align perfectly with RIL’s plan, as shared at its annual general meeting this June, of having most of the installations under its 100MW-solar-power production target placed as decentralised, rooftop ones and to power rural India.

New energy play

At the AGM, the conglomerate’s chairman and managing director (CMD) Mukesh Ambani had outlined their plan for their new energy business–first through hyper-integration, of scientific knowledge and technological innovation; second by building a business model that catches the upward curve in demand for clean energy and downward curve in cost of production; and third by working on improving efficiency of assets and operations.

In line with this, the CMD announced plans to invest Rs 75,000 crore (Rs $10 billion) over the next three years in renewable energy, including the setting up of gigafactories in Jamnagar, Gujarat; Jamanagar is from where RIL’s old-energy business was launched and it will be from where its new-energy business will be too. The gigafactories will be part of a 5,000-acre Dhirubhai Ambani Green Energy Giga Complex, which will produce various kinds of renewable energy. After this announcement, brokerage firm Bernstein estimated that RIL may have a $36-billion clean-energy business in the next five years.

The Jamnagar complex is expected to have an integrated solar photovoltaic module factory for the production of solar energy, an advanced energy storage battery factory for the storage of intermittent energy, an electrolyser factory to produce green hydrogen and a fuel-cell factory to convert hydrogen into motive and stationery power. It will house infrastructure to manufacture ancillary material and equipment for the gigafactories.

RIL will also add two divisions to collaborate with clean-energy plants across the world and to finance stakeholders in the ecosystem. The first, called the Renewable Energy Project Management and Construction Division, will help green MSME entrepreneurs deploy kilowatt to megawatt-scale solutions and the second called the Renewable Energy Project Finance Division will provide finance solutions by creating a platform to source long-term capital for these investments by approaching banks and global green funds.

As RIL transforms from an oil-to-gas business to a clean-energy one, it will be guided by a council of nine experts, headed by national research professor and independent director of RIL, R Mashelkar, and including ‘father of photovoltaics’ Martin Green and organic chemistry researcher Professor David Milstein who lead the research on splitting water to create hydrogen at the Weizmann Institute of Science.

Other players in the energy market are upping their clean-power game too. In September, the Adani Group too announced that it will invest $20 billion in renewable-energy production while NTPC, which set up a renewable energy subsidiary in October 2020, announced earlier this year in June that it will target 60GW of wind and solar power by 2032.

RIL aims to become a net carbon-zero company by 2035.

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