India’s two richest billionaires and a $1 trillion national plan: Green energy is great, but more fossil fuel is needed.
You know green energy has arrived in India when the country’s top fossil fuel magnates take the plunge. That’s now happened with two tycoons who built empires on coal, oil and gas in India suddenly leading the renewables charge.
Is this a good thing? Or, perhaps better put, how good a thing is this?
First came Gautam Adani, whose family fortunes have skyrocketed ($92 billion) with the rise of India’s Prime Minister, Narendra Modi, first in their shared home state of Gujarat and then on the national and global stage after Modi became prime minister in 2014.
Adani, the second richest person in India, added a renewable energy arm to his coal-ports-and-power empire in 2015, as the Modi government launched a major green energy push. Since then, Adani Green has ballooned into one of the biggest solar power developers in the world. Adani Group, a mash-up of a half dozen listed companies, plans to invest $70 billion in the next decade to become what Adani vows will be the world’s largest renewable energy company. The plans include building hydrogen electrolyzers, solar panels and batteries. The group recently signaled a foray into making electric vehicles and signed an agreement with a Korean steelmaker that could include manufacturing decarbonized “green” steel.
Now, Mukesh Ambani, India and Asia’s wealthiest person with a net worth of $98 billion and counting, and among the ten richest in the world last year, has joined the bandwagon. Ambani plans to plop down $75 billion over the next decade to make Reliance Industries — his oil, gas and telco colossus — a leader in every aspect of the renewable economy: solar panel manufacturing, solar farms, helping homeowners and small businesses put his solar panels on their rooftops, industrial-scale battery production and hydrogen electrolyzers.
Overstating these guys’ grand ambitions is impossible. Both have long cannily aligned their interests with Modi. And Modi is very interested in green energy. He’s vowed India will grow renewables more than ten-fold by 2030 so they make up half the country’s energy-producing capacity, a goal that requires India to add, on average, more renewable energy than has been built in the entire country to date each year between now and then. Those ambitions, part of the goal to reach net zero carbon emissions by 2070 announced last year, could require total investments of $1 trillion.
Adani Green has ballooned into one of the biggest solar power developers in the world.
But Ambani and Adani are in many ways a surprising duo for the job. Both built their fortunes on fossil fuels, often controversially. Neither has disavowed fossil fuels — indeed, quite the opposite.
Adani’s empire, a huge provider of electricity from traditional coal generators, has doggedly pursued a massive coal mining project in Australia that’s kept him atop climate activists’ villain list for a decade. The group plans its first shipment from Australian mines in the coming weeks, much to the dismay of coal opponents.
Ambani’s Reliance operates the world’s largest oil refinery next door to where he plans to build the renewable energy plants he’s now planning. He’s also cheerfully courting a hefty investment from the largest oil company on the planet, Saudi Arabia’s Aramco.
Getting stuff done
Yet there’s no denying the pair get things done.
In addition to building an oil-and-gas empire, Ambani has revolutionized India’s telecoms industry, an industry where he’d previously had no experience. In 2016, Reliance established a telecommunications arm dubbed Jio. In just two years, Jio built, from scratch, India’s largest mobile phone company. Leveraging massive investments, hyper-aggressive tactics and Ambani’s trademark strategic alignment with the Modi government, Jio completely upended India’s telco market, bringing smartphones and the mobile internet to India’s masses.
Adani has been snapping up flagging competitors’ operations in India’s cut-throat renewable energy business even as his company Adani Green Energy has become one of India’s hottest stocks.
Ambani and Adani are all about making money, the case with any mogul worth their weight. They’re masters of working India’s often politicized, highly regulated, government-dominated business landscape, where obtaining capital from state-owned banks and regulatory approvals from government bureaucracies separate the winners from the losers.
If anybody can quickly crank India’s renewables growth back into high gear, it’s these guys, especially with Modi cheering them on. Green energy fans probably should be clapping, too, as hard as that may be, even while continuing to take them to task for their fossil fuel endeavors.
If anybody can quickly crank India’s renewables growth back into high gear, it’s these guys, especially with Modi cheering them on.
There’s no fakery here. Neither is pretending to disavow fossil fuels or love green energy for its social value. As always, they’re aligned with the Indian government’s oft-stated ethos: green energy is great, but lots of fossil fuel is needed, well. Adani and Ambani will mobilize very real, very big bucks to make their green energy visions happen, just as they have with fossil fuels. India and the world will benefit from every green electron they produce. They offer one of the world’s best avenues to diversify the source of green energy mainstays such as solar panels and batteries beyond China, which utterly dominates manufacturing of the former and is close to conquering the latter. Adani already has a solar panel factory up and running; Ambani’s plans include both, along with plants to make hydrogen electrolyzers.
That these capable men will also continue pushing fossil fuels mightily is a problem, for sure. But perhaps not the biggest one when it comes to their ambitions.
Even two titans can’t do it alone
The bigger challenge could be to maintain diversity and competition in India’s green energy space. For all the capital these two men are marshaling, it won’t be nearly enough to achieve India’s goals. For that, a garden with a thousand flowers blooming is needed. Two Sequoias won’t be enough.
There are already signs of potential and current competitors of Ambani and Adani see the writing on the wall. The French energy super major TotalEnergies, pushing into green energy, earlier this year decided to buy into Adani Green Energy rather than go it alone in one of the world’s fastest-growing renewables markets. Meanwhile, Softbank chucked its once-soaring Indian solar ambitions over to Adani and left the country recently.
Ambani’s vision outlines few details at this point. But it does hint at a strategy that might help small and medium-sized businesses boost home and other small-scale rooftop solar — an area where India’s otherwise impressive renewables story has faltered badly. This would be welcome, the sort of growing the ecosystem will be critical going forward.
Even two titans can’t do it alone.