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New Delhi: Aditya Birla Group’s Hindalco Industries Ltd has entered into a commercial arrangement with Greenko Energies Pvt Ltd to set up a renewable energy project for supply of 100 MW round-the-clock carbon-free power to its smelter in Odisha.

The arrangement involves the development of 375-400 MW of solar and wind capacity. The renewable energy project will be set up as a captive generation facility under a 25-year offtake arrangement and will supply power to Hindalco’s Aditya Aluminium smelter in Odisha, enabling reduction of CO2 emissions by 680,000 tonne annually, Hindalco said in a regulatory filing.

Further discussions between the parties to execute a power purchase agreement along with the other supplementary agreements are expected to be completed soon.

Aluminium smelting requires reliable and continuous power. According to Hindalco, the project will be one of the world’s first for the aluminium sector with very high (over 85%) reliability from solar and wind power without dependence on grid electricity.

Hindalco will also be the first aluminium company in India to use such RTC (round the clock) carbon-free power for smelting.

Greenko will design, construct, partly own and operate the solar and wind facilities. It will also make available appropriate storage capacity from its hydro pump storage project in Pinnapuram, Andhra Pradesh to ensure continuous power supply.

The filing said that the RE project takes forward Hindalco’s vision of responsible and sustainable manufacturing. Over the past few years, Hindalco has already invested in over 100 MW of solar and wind power.

The renewable energy project adds 100 MW (RTC) of captive power and enhancement of the same to up to 350 MW of round-the-clock carbon-free energy shall be explored in the future.

“We have made climate action integral to our business and our expansion plans have been shaped by our ESG focus. The agreement with Greenko is a significant step towards reducing our carbon footprint and cementing our status as the world’s most sustainable aluminium company. We are guided by our long-term commitment of becoming net carbon-neutral by 2050 and we are happy to partner with Greenko in this audacious journey," said Satish Pai, managing director, Hindalco.

The renewable energy initiative is aligned with Hindalco’s commitment to become net carbon neutral by 2050.

“In this case, the RE project along with Greenko’s PSP will ensure firm and predictable supply even at individual time block level without any banking support from the grid, unprecedented for RE project globally, thereby committing very high reliability to Hindalco. We look forward to taking this partnership further ahead and contribute to Hindalco’s long term commitment of becoming a net carbon-neutral company by 2050, said Anil Kumar Chalamalasetty, CEO and managing director at Greenko.

The tie up also comes at a time when global ESG (environmental, social and governance) norms have gained significance and European Union has already come up with stringent compliance norms on imports from other countries. Hindalco is a major exporter of aluminium.

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