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New Delhi: As part of its strategy to reduce carbon footprint by going green, ArcelorMittal on Tuesday announced its partnership with Greenko Group, wherein ArcelorMittal will invest $600 million to own and fund a round-the-clock 975 megawatt (MW) renewable energy project in Andhra Pradesh.
Leveraging hydro pumped storage plant (PSP) will help provide round-the-clock green energy to user industries. The idea is to use cheap green power during off-peak hours to raise water to a height and then release it into a lower reservoir to generate electricity when the demand for electricity goes up.
With the European Union coming up with the world’s first carbon tax, Indian steel and aluminium makers such as ArcelorMittal, JSW Group, Vedanta and public sector SAIL are working to reduce their carbon footprint, as reported by Mint on 9 December. The tax aims to ensure that non-EU firms exporting to EU pay the same price for their carbon footprint in Europe as the EU firms do.
“Utilising Greenko’s hydro pump storage project, 250 MW of uninterrupted renewable power will be supplied annually to AM/NS India (ArcelorMittal Nippon Steel India) under 25-year off-take, reducing AM/NS India’s carbon emissions by 1.5 million tonnes per annum," the companies said in a joint statement.
This comes in the backdrop of decarbonisation happening in the industrial market, with the union government also putting policy guidelines in place. A case in point being union power ministry in June extending the waiver of Inter-State Transmission system (ISTS) charges on transmission of electricity generated from solar and wind sources for projects to be commissioned up to 30 June 2025. The ISTS waiver was also allowed for Hydro Pumped Storage Plant (PSP) and Battery Energy Storage System (BESS) projects to be commissioned up 30 June 2025.
“ArcelorMittal’s joint venture company in India, ArcelorMittal Nippon Steel India (AM/NS India), will enter into a 25 year off-take agreement with ArcelorMittal to purchase 250 MW of renewable electricity annually from the project. This 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," the statement said.
Backed by GIC Holdings Pte Ltd, Abu Dhabi Investment Authority and Japan’s ORIX Corp., Greenko has 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. This comes amid a new ‘Energy Storage System’ (ESS) policy that has proposed no requirement for environment clearances for off-river pumped storage plants and no obligation for free power to the states concerned, as reported by Mint earlier.
“The c. $0.6 billion project will combine solar and wind power and be supported by Greenko’s hydro pumped storage project, which helps to overcome the intermittent nature of wind and solar power generation," the statement said.
Indian metal majors depend on captive power production to meet their energy needs. According to industry estimates India has around 78 gigawatt (GW) of installed captive power capacity of which around 56 GW is fuelled by coal that burns around 200 million tonnes of coal annually.
“The project will be owned and funded by ArcelorMittal. Greenko will design, construct and operate the renewable energy facilities in Andhra Pradesh, Southern India. Project commissioning is expected by mid-2024," the statement added.
Greenko has been forming such partnerships. It recently partnered with Adani Group wherein the infrastructure conglomerate plans to utilise Greenko’s 6 GWh of pumped hydro storage capacity to tap round-the-clock power supply of up to 1GW. Also, National Investment and Infrastructure Fund’s (NIIF) Ayana Renewable Power Pvt. Ltd. has partnered with Greenko Group to store 6 GWh of power in hydro pump storage plants that Greenko is building at Pinnapuram in Andhra Pradesh.
According to Central Electricity Authority (CEA), India’s apex power sector planning body the country requires 27 GW of battery storage by 2030 with four hours of storage and 10 GW of hydro pumped storage plants (PSP). Around 96 GW has been identified as a potential capacity for hydro pump storage schemes.
“Large amounts of green energy are one of the key foundations for both a net zero economy and a decarbonised steel industry," Aditya Mittal, CEO, ArcelorMittal said in the statement.
India is running what will become the world’s largest clean energy programme. At COP-26 summit in Glasgow, India announced its plans to increase non-fossil fuel power generation capacity to 500 GW by 2030 and its commitment of achieving net-zero carbon emissions by2070.
“This is a pioneering partnership with the world’s leading steelmaker and we hope it will serve as a blueprint for the adoption of renewable power for large-scale steel manufacturing in India," Anil Kumar Chalamalasetty, CEO and managing director at Greenko said in the statement.
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