The Board of Vedanta approved plans for the Group to source 91 MW of hybrid renewable energy (50 MW for aluminum operations, 16 MW for copper operations, and 25 MW for oil and gas operations) and 600 MW of solar power (for aluminum operations) for its operations in copper, oil, and gas, and Jharsuguda, India, on January 27, 2023.
As a result, the Company will carry out Power Delivery Agreements (PDA) via special purpose vehicles (SPVs), i.e., subsidiaries of Serentica Renewables India (SRIPL) (previously Sterlite Power Technologies), a company that deals in the supply of renewable energy based on solar, wind, and battery storage technologies.
Vedanta's ESG vision Of Net Zero Carbon
The move, which is in line with Vedanta's ESG vision of Transforming for Good, is the first in a series of steps the company will take to achieve its targets of becoming Net Zero Carbon by 2050 or earlier and using 2.5 GW of Round the Clock (RTC) Renewable Energy for its operations by 2030.
For smelting and related operations as well as to meet the power needs of capacity expansion at Vedanta - Aluminium Jharsuguda, Copper, and Oil & Gas Operations, Vedanta aims to consume a significant amount of renewable energy. This power source could potentially block the atmospheric entry of 38 million tons of greenhouse gases over the course of a PDA once it is operational.
According to industry standards, these projects will be built using a captive model and a build-own-operate (BOO) basis. The Power Delivery Agreement shall be in force for a period of 25 years from the Date of Commissioning (COD) of the Project. Within 24 months of the PDA's signing, the SPVs must start supplying electricity. The company will benefit from having a reliable supply of energy from renewable sources and from being shielded from market volatility. Each SPV will have 26% of its equity owned by Vedanta and its subsidiaries, and the project will be financed with a debt-to-equity ratio of 70:30.
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