New Delhi: Global steel major ArcelorMittal on Tuesday announced that it has entered a strategic tie-up with Greenko Group for developing a round-the-clock renewable energy project.
The renewable energy project will have a nominal capacity of 975 Mw.
The steel company in a statement said, “ArcelorMittal today announces it has established a strategic partnership with Greenko Group, India's leading energy transition company, to develop a 'round the clock' renewable energy project with 975 Mw of nominal capacity.”
Arcelor Mittal said the project, which worth $600 million, will combine solar and wind power and be supported by Greenko’s hydro pumped storage project. This will help to overcome the challenges due to intermittent nature of wind and solar power generation.
Areclor Mittal will own the project and will fund it, while Greenko will design, construct, and operate the renewable energy facilities in Andhra Pradesh. The project is expected to be commissioned by mid-2024.
The 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 per cent 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 project offers AM/NS India the dual benefits of lower electricity costs and lower CO2 emissions, and it also provides an attractive return on investment for ArcelorMittal.
Aditya Mittal, CEO, ArcelorMittal, said in the statement, "This is an attractive opportunity for ArcelorMittal. We will be partnering with a highly experienced energy transition company in a project that will enable our joint venture company AM/NS India to reduce both its electricity costs and carbon emissions, as well as providing consistent, guaranteed returns for ArcelorMittal."
Commenting on the partnership, Anil Kumar Chalamalasetty, CEO and MD at Greenko, in the statement said, “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. These efforts will also represent a notable contribution to India’s own commitment to build 500 Gw of renewable energy capacity by 2030.”
ArcelorMittal is the world's leading steel and mining company having presence in 60 countries and primary steelmaking facilities in 16 countries. In 2021, ArcelorMittal had revenues of $76.6 billion and crude steel production of 69.1 million metric tonnes, while iron ore production reached 50.9 million metric tonnes.