(MENAFN- KNN India)
New Delhi, Nov 5 (KNN) The recent earnings reports of large industrial players reveal a notable trend: companies are experiencing a significant reduction in energy costs, driven by a strategic shift towards renewable power sources.
Major firms like Ambuja Cement, ACC, L&T, JSW Steel, and Hindustan Zinc are reporting reductions in energy bills, a result of long-term power purchase agreements (PPAs) for renewable energy that offer a cheaper alternative to conventional coal-based electricity.
Experts note that these renewable PPAs allow companies to lock in energy prices for up to 25 years, providing cost stability and a lower per-unit cost than the grid-sourced power.
Kartikeya Sharma, co-founder of solar energy firm Sunsure, highlights that many industrial giants are now opting for renewable power for up to 75 per cent of their needs through open-access solar, wind, and energy storage, reported mint.
This shift is particularly prevalent in high-consumption sectors like cement, metals, and mining, where companies benefit from both cost savings and compliance with government-mandated Renewable Purchase Obligations (RPOs).
RPOs require companies to source a percentage of power from green energy or face penalties, further incentivising the switch.
Ambuja Cement is a prime example, with its power costs per tonne dropping by 27 per cent year-on-year in the July-September quarter. The company attributes these savings to a growing focus on green energy, which now accounts for nearly 25 per cent of its power mix.
Similarly, ACC, a subsidiary of Ambuja Cement, reported a 23 per cent reduction in power expenses through increased use of waste-heat recovery systems (WHRS), solar, and wind power.
Hindustan Zinc, another prominent player, has doubled its renewable energy share to 14 per cent over the past quarter. The company's Chief Financial Officer, Sandeep Modi, underscored the impact, noting that the shift to renewables reduced energy costs by USD 9 per tonne.
JSW Steel, another heavyweight, has also made strides, securing 375 MW of renewable energy, with plans to expand this capacity to 2.5 GW by FY27.
The price advantage of renewables is stark. For instance, a solar-wind hybrid project can deliver power at around Rs 5.50-5.75 per unit, compared to grid prices of Rs 8.90-9.50 per unit, offering savings of nearly 40 per cent. This cost difference is particularly compelling for industries with high energy demands.
The move away from grid power reflects a broader trend among commercial and industrial (C&I) consumers, who are increasingly sourcing power directly from renewable energy producers.
This transition marks a significant step in India's journey toward a sustainable energy future, with corporations leading the charge in reducing carbon footprints while bolstering financial efficiency.
(KNN Bureau)
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