Arcelor Mittal, Greenko In $600 million deal for 975 MW RTC power

Greenko

In one of the largest corporate deals to mitigate carbon emissions in India, metals major ArcelorMittal has announced it will invest $600 million (Over Rs 4500 crores) to develop, in partnership with Hyderabad based Greenko Group, a 975-MW ‘round the clock’ renewable energy project in Andhra Pradesh. ArcelorMittal had declared plans to foray into green energy last year.

The project will combine solar and wind power, and will be supported by Greenko’s hydro-pumped storage project to even out supply. Pumped storage uses low cost green power during off-peak hours to raise water to a height and then release it into a lower reservoir to generate power when there is more demand and power prices are higher. Greenko will design, construct and operate the renewable energy facilities. The entire project will be owned and funded by ArcelorMittal.

The move to mitigate emissions during production by ArcelorMittal is being made even as key export markets like the European Union lay out new tariff, and non-tariff barriers for producers outside the Union. A carbon tax has already been proposed by the EU for instance on metal producers, to ensure producers outside EU meet the same standards as those within the union.

Ayana, Greenko Partner to Develop 6000MWhr Storage Capacity

Also Read

Close to one-fourth, or 250-MW power, generated from the project is likely to be commissioned by the middle of 2024. The entity buying the power will be ArcelorMittal-Nippon Steel (AM/NS) India, a 60:40 steelmaking joint venture between the two global steel giants that had bought the erstwhile Essar Steel’s Hazira unit through the insolvency route in 2019.

AM/NS India will enter into a 25-year offtake agreement with ArcelorMittal to purchase 250 MW of renewable electricity annually from the project. The deal will result in over 20% of the electricity requirement at AM/NS India’s Hazira plant coming from renewable sources, reducing carbon emissions by approximately 1.5 million tonnes per year. And possibly leading to ‘green steel’.

The metals industry, due to its energy intensive nature, has been considered one of the last bastions for renewable energy to change, one reason why alternatives like green hydrogen are considered a key option too, to reduce their   carbon impact.

RTC Tender For 2.5 GW Thermal Plus Renewable Attracts L1 Bid of Rs 3.01

Also Read

For Greenko, which has been stitching up multiple partnerships for its renewable energy plans, the deal is yet another addition to its roster of large partners. In recent times, the firm has moved decisively towards building large storage capacities. It is backed by GIC Holdings Pte Ltd, Abu Dhabi Investment Authority, and Japan’s ORIX Corp., Greenko has one of India’s largest operational clean energy portfolio of 7.3 GW and is building 30 GWh of storage capacity as part of its plan to set up an energy storage cloud platform of 100 GWh.