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Cement Companies Plan to Invest INR 5,500 Cr in Green Power Projects in Two Years

The report estimates that green power will constitute 40-42 percent of the overall power mix for cement companies by March 2025, up from around 35 percent in March 2023.

September 19, 2023. By EI News Network

Major cement producers are aiming for a 15-17 percent reduction in emissions over the next 8-10 years by incorporating more blended cement, which requires less clinker and, subsequently, less fuel. This shift is set to grow the use of green power from sources like solar, wind, and Waste Heat Recovery Systems (WHRS).

Cement companies are anticipated to increase their utilization of green power from 35-40 percent by FY25, resulting in savings of 140-160 basis points through reduced energy costs, according to a research report by ICRA Ratings.

The report estimates that green power will constitute 40-42 percent of the overall power mix for cement companies by March 2025, up from around 35 percent in March 2023.

Anupama Reddy, Vice President at ICRA, anticipates that major cement manufacturers will invest approximately INR 5,500 crore (USD 660.1 million) in green power projects, adding 537 MW of capacity in the next two years, considering installation costs of INR 12-13 crore (USD 1.44-1.56 million) per MW for WHRS and INR 4-4.5 crore (USD 480-540 thousand) for solar plants.

These investments are expected to yield annual electricity cost savings of INR 2,000 crore (USD 240 million) once the green power capacity is fully operational.

As the cement industry shifts towards green electricity sources, reducing its dependence on expensive thermal power and the grid, operating costs are anticipated to decrease, and carbon emissions will be reduced.

Reddy further emphasized the advantages of green power, underlining that replacing 25 percent of thermal power with green power, with costs of INR 6.5/unit for thermal, INR 0.75/unit for WHRS, and INR 4.5/unit for solar, could result in cost savings of 15-18 percent and a 140-160 basis point (bps) improvement in operating margins for cement companies.

Tags:

Waste Heat Recovery Systems

Green power

Solar, wind, hybrid

Solar plants

Renewable power capacity

Reduce Carbon Emissions

Thermal power