Indian billionaires face off in race to solar domination

Indian tycoon Mukesh Ambani’s $10 billion entry into renewable energy could drive solar tariffs further to the ground and ignite bidding wars with fellow billionaire Gautam Adani, industry analysts say. India’s two richest men are vying to be at the forefront of Prime Minister Narendra Modi’s ambition to ramp up green energy capacity in the world’s secondmost populous country more than fourfold to 450 gigawatts (GW) by 2030.

They have mostly avoided operating in each other’s space and the renewable energy push by Ambani’s flagship Reliance Industries and the Adani group of companies will be the highest profile faceoff between them.

Ambani announced last month 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. Three days later, Adani announced that his green energy venture would add 5 GW every year this decade, from a current level of about 3.5 GW.

Analysts say there is sufficient space for multiple companies to grow as a part of India’s ambitious green energy target, but tariffs could fall further as companies try

to outdo each other in aggressive bidding wars to win projects.

Solar tariffs in India are already among the lowest in the world, having fallen below 2 Indian rupees ($0.0269) per kilowatt hour in auctions conducted in Gujarat.

“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.

India is the world’s third biggest emitter of greenhouse gases. Coalbased power generation could drop dramatically as the major players go green, analysts say.

Rishab Shrestha, senior analyst at consultancy Wood Mackenzie said he expects India’s coal generation share to drop to 50 percent in early 2030s from over 70 percent currently.

Adani has not announced plans to build any new thermal power plants, and his companies are unlikely to be affected by relatively higher costs of coal-fired power.

Both groups are trying to improve their clean energy credentials as investors pay more attention to the environmental impact of their businesses and make decisions based on ESG ratings, analysts say.

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.