Synopsis:
Reliance Industries is looking to buy Norwegian solar module maker REC Group as part of the oil refiner’s ₹75,000 crore push into clean energy
Reliance Industries Ltd (RIL) is in talks to buy REC Group, a Norwegian solar module manufacturer, as part of the oil refiner’s ₹75,000 crores clean energy drive, according to two people familiar with the matter
. At the company’s annual general meeting last month, chairman and managing director Mukesh Ambani unveiled plans to build the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres near Jamnagar. A mega factory for solar photovoltaic (PV) modules will be integrated into the site.
REC Group, based in Norway, has a solar panel production capacity of 1.8 gigawatts (GW) per year and has installed roughly 10GW of capacity worldwide. Founded in 1996, REC has its regional headquarters in North America, Europe, and Asia-Pacific.
In an emailed response, a spokesperson for RIL declined to “comment on media speculation and rumours”. “Our company evaluates various opportunities on an ongoing basis,” the spokesperson said.
A REC Group spokesperson said the firm “is in general not commenting about rumours in the marketplace.”
Despite India’s plans to build 175 GW of renewable energy capacity by 2022, including 100 GW of solar, Chinese companies such as Trina Solar Ltd, Jinko Solar, ET Solar, Chint Solar, and GCL-Poly Energy Holdings Ltd dominate the solar equipment market.
India currently has only 3GW of solar cell production capacity and 15GW of solar module manufacturing capability.
“REC is considered to be a good quality supplier,” said one of the two people cited above, requesting anonymity. Module prices have risen to 25 cents per kWh, according to Chinese solar equipment suppliers.
Chinese module manufacturers began raising prices by more than a fifth in December, reneging on their contracts to supply equipment, despite the risk of their bank guarantees being encashed.
“We will start with raw silica and convert this to polysilicon, which we will then convert to ingot and wafers. These wafers would be used to make high-efficiency solar cells and finally assembled into solar modules of the highest quality and durability,” Ambani said in his speech last month.
The company’s intentions coincide with a ₹4,500 crore production linked incentive (PLI) initiative for solar photovoltaic module manufacturing to aid India’s capacity expansion.
The programme is expected to add 10GW of capacity and bring in roughly ₹17,200 crores of direct investments. India wants to play a bigger role in global supply chains, in addition to utilizing its expanding green energy sector to boost manufacturing.
“We will target to achieve costs that are the lowest in the world to ensure affordability of our solar modules,” Ambani said in his speech. “Reliance will establish and enable at least 100GW of solar energy by 2030. A significant part of this will come from rooftop solar and decentralized solar installations in villages.”
From April 1, 2022, India will levy a 40% basic customs duty on solar modules and a 25% tariff on solar cells, making imports more expensive and encouraging local manufacturing.
A list of approved solar PV models and module manufacturers for government-supported schemes, including projects from which distribution firms acquire power, has also been provided by the ministry of new and renewable energy.
By 2030, India wants to have 450 GW of renewable energy capacity. It now has 89.63 GW of installed renewable energy capacity, with another 49.59 GW under construction. In addition to this, RIL also aims to build mega plants in Jamnagar for electrolyzers, fuel cells, and energy storage.
