Cement companies are going green, but meaningful change will take time
₹5.5 to ₹8 per kilowatt-hour (kWh), while WHRS power costs ₹1 per kWh and solar power costs (under a power purchase agreement) ₹4 to ₹4.5 per kWh, according to Motilal Oswal Financial Services. The brokerage house estimates the share of green energy in the sector’s total power consumption will rise from 35% in FY24 to 50% by FY27. Also read: Is HDFC Life a new competitor to the mutual fund industry? Power and fuel costs are estimated to comprise about 35-40% of the sector’s total production cost.
Some companies have made significant progress on this front. For instance, at Shree Cement Ltd and JK Cement Ltd, green power accounted for more than 50% of total power consumption in FY24. Larger peers including UltraTech Cement Ltd, ACC Ltd and Ambuja Cements Ltd are also moving in this direction and have committed to adding more green power capacity.
Another benefit of using alternative fuels is that it will help the sector lower its carbon footprint. Cement manufacturing requires extensive use of coal and petroleum coke during clinker production, which releases harmful greenhouse gases. Also read: Crompton Greaves poised for better growth momentum Cement manufacturers’ green efforts are slowly changing this for the better.
An analysis by Kotak Institutional Equities showed the greenhouse gas emission intensity of certain large cement companies has fallen in recent years (2017-2023). In 2023, Dalmia Bharat Ltd recorded the lowest intensity while UltraTech recorded the highest, said the Kotak report. But meaningful de-carbonisation will be a gradual process owing to challenges such as the long gestation period of some WHRS projects and regulatory approvals.
Read more on livemint.com
