ArcelorMittal announced a renewable energy partnership with Greenko Group on Tuesday as part of its greening strategy to reduce its carbon footprint. ArcelorMittal will invest $600 million in the alliance to own and fund a 975 megawatt (MW) renewable energy project in Andhra Pradesh.
The project will use a Hydro Pumped Storage Plant (PSP) to provide ArcelorMittal Nippon Steel India with continuous green energy. The plan is to use cheap green power during off-peak hours to raise water to a certain height and then release it into a lower reservoir to generate power when demand is higher.
With the European Union introducing the world's first carbon tax, Indian steel and aluminum producers such as ArcelorMittal, JSW Group, Vedanta Ltd, and the state-run Steel Authority of India Ltd (SAIL) are working to reduce their carbon footprint, according to Mint on December 9. The tax aims to ensure that non-EU companies exporting to the EU pay the same price for their carbon footprint in Europe as EU companies.
"ArcelorMittal Nippon Steel India (AM/NS India), ArcelorMittal's joint venture company in India, will enter into a 25-year off-take agreement with ArcelorMittal to purchase 250 MW of renewable electricity annually from the project." According to a joint statement, "this will result in more than 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."
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 a 100 GWh energy storage cloud platform. It is backed by GIC Holdings Pte Ltd, Abu Dhabi Investment Authority, and Japan's ORIX Corp.
This comes amid a new 'Energy Storage System' policy that has done away with the need for obtaining environmental approvals for off-river pumped storage plants and any obligation for free power to the states involved, as Mint previously reported.
"ArcelorMittal will own and fund the project." Greenko will design, build, and operate renewable energy facilities in Andhra Pradesh, India's southernmost state. The project is expected to be completed by the middle of 2024 "the statement continued. "Large amounts of green energy are one of the critical pillars of both a net-zero economy and a decarbonized steel industry." ArcelorMittal's CEO, Aditya Mittal, stated this.
Greenko has also formed alliances with other businesses. It recently partnered with Adani Group, which plans to use Greenko's 6 GWh of pumped hydro storage capacity to tap a round-the-clock power supply of up to 1 GW.
