Hyundai Motor India Ltd. has announced plans to set up two renewable power plants in Tamil Nadu to completely decarbonise its manufacturing units in the state.
India's second largest carmaker has signed a power purchase and shareholder agreement with Fourth Partner Energy Pvt., a renewable energy-as-a-service enterprise, to set up a 75 MW solar power plant and a 43 MW wind power plant for captive use at its Chennai plant, according to a statement on Thursday.
The deal is crucial, for it ties with Hyundai India's sustainability goals—at present, the firm fulfils 63% of its energy needs from renewable sources, and aims to increase that to 100% by 2025.
“Our collaboration with FPEL will help us achieve the RE100 benchmark by 2025,” Gopal Sivaramakrishnan, chief manufacturing officer at Hyundai India, said in the statement. “We believe that this collaboration will inspire other industries to embrace renewable energy and contribute to a sustainable future.”
As part of the deal, Fourth Partner Energy has formed a special purpose vehicle, FPEL TN Wind Farm Pvt., in which Hyundai Motor India will invest Rs 38.05 crore in one or more tranches to pick up a 26% stake, according to an exchange filing on Wednesday. The SPV will supply wind and solar power to Hyundai India's Chennai plant for 25 years. The deal has to be completed in 14 months.
“The deal demonstrates the vital role corporates play in building and ensuring a sustainable future,” Vivel Subramanian, co-founder and executive director at Fourth Partner Energy, said in the statement. “Through this agreement, we will be supplying Hyundai India with over 25 crore units of clean energy every year, which will help the company mitigate carbon dioxide emissions by two lakh tonnes annually.”
Hyundai India currently powers its Chennai facility using a 10 MW rooftop solar plant and renewable energy sourced from India Energy Exchange.
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