⚡ two mota bhais, one green war
India's biggest energy producers battle it out for the most abundant element on Earth.
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The Big Story
Climate change...Blah Blah Blah...emissions...Blah Blah Blah...
Honestly, we've all heard it before. But as the COP26 climate summit continues in Glasgow, world leaders and global philanthropists continue to make big promises to reduce emissions and avoid the catastrophic impacts of climate change.
But none were as bold as the statements made by Indian Prime Minister Narendra Modi, who stated that the nation will reach net-zero emissions by 2070.
But he didn't just stop there.
He also pledged to increase India’s 2030 target for low-emission energy capacity from previously-set 450 gigawatts to 500 and promised to produce half the nation's electricity through renewable energy.
While these are some ambitious goals that require conventional frameworks and trillions of dollars of investments over the decades, the clash over leading India's green future has already begun.
And it's between two of the world's richest business tycoons: Mukesh Ambani and Gautam Adani.
Decarbonization of India
In India, coal is king. It provides for half of India’s commercial primary energy needs and is also a major fuel for power generation. In fact, as per Bloomberg, more than 70% of electricity generated within the country came from coal power plants last year.
But given the global shortage of the most-polluting fossil fuel due to the supply crisis, energy-hungry industries are looking for alternatives to satisfy their demand.
Here's where the two billionaire businessmen come into the picture.
In June, Ambani's Reliance Industries Ltd. said that it will invest $10 billion in green energy over three years to focus on solar, green hydrogen, batteries, and fuel cells. Three months later, Adani Group also announced its plans to spend $20 billion over 10 years in solar, wind, green hydrogen, and energy infrastructure.
Why the rush, you ask? For that sweet, sweet government incentive. The transition from coal to renewable energy requires significant funding, and consequently, both Adani and Ambani are counting on them to spur the domestic manufacturing ecosystem of solar power equipment.
But that's not what the two billionaires are fighting over.
While both have evidently made massive investments into renewable energy, it's hydrogen—the simplest element known to mankind—where the tough contest between the two conglomerates could lead India's journey towards decarbonization.
Ambani is a large producer of gray hydrogen—the dirty, inexpensive kind used to power industrial and refinery operations. To make it green, it needs electrolysers that break down water or other electrolytes into hydrogen molecules. However, running these electrolysers to produce green hydrogen sustainably requires massive amounts of electricity.
What's more, the viable technology required for this process is expensive, and as a result, green hydrogen is currently priced around $4-$6/kilogram. But Ambani has previously talked about a New Green Revolution that aims to price hydrogen “under $1 per 1 kilogram within a decade.”
For Adani Group, its strength lies in power supply, transportation, and distribution. In the past, the company also expressed interest in green hydrogen and building electrolysers. And while it can produce green hydrogen similar to Reliance, one key leverage it has over the latter is its massive distribution, which gives it a competitive advantage over handling hydrogen given its flammable nature.
But wait!
If the two Gujarati entrepreneurs focused on distinct parts of the value chain, they can both be at an advantage. While their cooperation seems quite unlikely, a strong policy push by the government can help capitalize on their enthusiasm and lay the groundwork for an open network that invites strong competition from other players in the market.
Will the Indian government be able to get the two mota bhais to lead India's decarbonization journey? Let us know in the comments.
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