Vedanta Limited Board has approved plans to source 580 MW of renewable energy for its operations across India. In a statement to the stock exchanges, Vedanta said today that it has signed a power delivery agreement with special purpose vehicles (SPVs) i.e. affiliates of Sterlite Power Technologies Pvt Ltd (SPTPL) – a company engaged in business to supply hybrid‐based power with solar, wind and storage solutions.
The move marks the beginning of 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 aims to partially replace existing captive thermal power capacities with renewable energy for smelting and associated operations and meet power requirements of capacity expansion at Vedanta Aluminium Limited‐ Jharsuguda, Balco and Hindustan Zinc.
Vedanta’s Chief Safety Officer and Group CEO Sunil Duggal said the project is poised to become one of the largest renewable energy hybrid projects in India. “It demonstrates the group’s commitment to become one of the greenest natural resources companies in the world,” he said Duggal.
“The overall arrangement is to procure 580 MW of renewable power where SPTPL and its affiliates are setting up a 1960 MW hybrid‐based renewable energy capacity to achieve this generation in a combination of solar, wind and storage solutions,” the company statement said.
Once this power supply comes online, it has the potential to prevent about 2.7 million tons of GHG emissions from entering the atmosphere.
“In line with prevailing market practices, these projects will be built on a 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,” a company statement said.
The SPVs are expected to start delivering the power within 24 months of the PDA signing. This will be helpful in securing the continuous supply of power through renewable energy sources at a lower cost and insulate our business from commodity market volatility.
The project will be funded on a 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 ₹850 crore with an expected IRR of more than 25 per cent.
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