Reliance Acquires 100% Stake in Faradion Ltd

With its aggressive green energy plans, Reliance has been consistently using the inorganic route to expand its renewable energy franchise. The latest is the acquisition of a 100% stake in Faradion Ltd of UK, which it acquired at an enterprise value of GBP100 million or approximately Rs.1,000 crore.

Faradion Ltd is based out of Sheffield and Oxford in the United Kingdom and owns the patented sodium-ion battery technology. Faradion has a strong IP portfolio encompassing several aspects of the sodium-ion technology for batteries.

The acquisition will be made by Reliance New Energy Solar, a unit of Reliance Industries. The acquisition of Faradion will provide Reliance New Energy with access to High Density, sustainable battery technology at an extremely competitive cost.

Faradion has been looking for partnerships from like-minded companies to accelerate the commercial roll out of its technology. Obviously, Reliance with its huge balance sheet and aggressive green plans fits the bill. Reliance New Energy also proposes to invest GBP25 million in the company (Rs.250 crore) to support early roll out of the batteries.

There are several advantages that the Faradion sodium-ion battery brings to the new energy business. Firstly, it is based on sodium and not on rare minerals like cobalt, lithium or graphite. Secondly, these batteries are safe for transport and storage. Thirdly, the cost of ownership is almost at par with lead-acid batteries and scale will reduce the costs further.

In terms of application, the sodium-ion battery is already a proven technology in commercial applications. It can operate with efficiency even in temperatures ranging from -30 degrees to 60 degrees, making it suitable for all conditions. It is also commercially viable due to its quick charging and discharging abilities.

For Mukesh Ambani and his team at Reliance Energy, this deal builds on their ambition to create a new energy ecosystem. Apart from being safe and reliable technology, the sodium ion technology is also commercially viable and extremely competitive in terms of cost of production and maintenance.

According to Faradion, sodium is the sixth most abundant element on the planet and hence availability should never pose a constraint. The capital participation by Reliance group will make the sodium-ion technology for batteries part of the global energy value chain.