UltraTech Cement, an Aditya Birla Group company, has announced that it will source renewable energy in captive mode from CleanMax’s special-purpose vehicle (SPV), Clean Max Sapphire.

The company has entered energy supply, share subscription, and shareholders agreements to acquire a 26% equity share in Clean Max Sapphire, investing up to ₹457.6 million (~$5.3 million).

The SPV will set up a 55 MW wind-solar hybrid project on a captive basis in Honawad in Vijayapur district, Karnataka to supply power to UltraTech Cement.

The share acquisition will be completed within 180 days.

UltraTech Cement, in its regulatory filing, disclosed that this acquisition will help the company meet its green energy needs, optimize energy costs, and comply with India’s regulatory requirements for captive power consumption.

In its 2023 Annual Report, UltraTech Cement stated that green energy comprised 19.27% or 650 MW of its total energy usage during the year.

The company added 76 MW of renewable power capacity in 2023, bringing its total renewable power capacity to 345 MW.

UltraTech Cement aims to source 100% of its electricity from renewable sources by 2050, with the company’s Ratnagiri cement grinding unit in Maharashtra already transitioning to 100% renewable energy.

The company has also set up 345 MW of solar and wind projects in India to meet its energy needs.

In October, UltraTech Cement said it would procure an additional 7 MW of wind-solar hybrid power from Continuum MP Windfarm, raising the total procurement from 14 MW to 21 MW.

Transitioning to renewable energy sources is a key imperative for hard-to-abate industries like cement. According to a World Economic Forum report, global cement manufacturing produced 1.6 billion metric tons of CO2 in 2022 or about 8% of the world’s total CO2 emissions.

UltraTech is part of the Climate Group’s RE100 initiative as part of its commitment to meet 100% of its electricity requirement through renewables sources by 2050.

According to credit ratings agency ICRA, green power will account for approximately 40-42% of the total power mix of major cement companies in India by March 2025, up from around 35% as of March 2023.