The board of Vedanta Ltd has approved plans for the Vedanta Group to source 580 mw of renewable energy for its operations across India.
Vedanta Ltd has signed a Power Delivery Agreement (PDA) with special purpose vehicles (SPVs) i.e. affiliates of Sterlite Power Technologies Pvt Ltd (SPTPL)
SPTPL, in turn, is a company engaged in business to supply hybrid-based power with solar, wind and storage solutions. An affiliate of Sterlite Power Transmission Ltd (or Sterlite Power), SPTPL is an end-to-end energy solutions company enabling large-scale heavy energy intensive industries and sector to accelerate their clean energy transition.
The move marks the beginning in the series of actions by the company to deliver on its goal of becoming “Net Zero Carbon by 2050 or sooner” and “using 2.5 GW of Round the Clock (RTC) Renewable Energy for its operations by 2030”, Vedanta said in a release.
From thermal to RE
Vedanta aims to partially replace existing captive thermal power capacities with renewable energy for smelting and associated operations, and meeting power requirements of capacity expansion at Vedanta Aluminium Ltd (Jharsuguda), Balco and Hindustan Zinc.
The overall arrangement is to procure 580 mw of renewable power where SPTPL and its affiliates are setting up a 1,960-mw hybrid-based renewable energy capacity to achieve this generation in a combination of solar, wind and storage solutions. Once this power supply comes online, it has the potential to prevent about 2.7 million tonnes of GHG emissions from entering the atmosphere, the release added.
Also read: Vedanta Aluminium Becomes India’s Largest Industrial RE Consumer In 2021
Group Captive Model
In line with prevailing market practices, these projects will be built on “Group Captive” model and build-own-operate (BOO) basis. The term of the power delivery agreement will be for a period of 25 years from the Date of Commissioning (DOC) of the project. The SPVs are expected to start delivering the power within 24 months of the PDA signing. This will be helpful in securing continuous supply of power through renewable energy source at lower cost and insulate our business from commodity market volatility.
The project will be funded on 70:30 debt-equity basis; Vedanta Ltd and its subsidiaries will own 26 per cent of equity in the respective SPVs at a total investment of up to Rs.850 crore. The remaining 74 per cent in each SPV will be held by affiliates of Sterlite Power Technologies Pvt Ltd.
Featured photograph shows Vedanta’s aluminium smelter at Jharsuguda, Odisha.
