Grey to Green

Grey to Green

Power cost is one of the biggest cash costs (1/4th) of the variable cost in cement production. HeidelbergCement has been continuously focusing on sourcing sustainable power at economical cost. COVID-19 led to reduction in demand for power and consequently reduction in power cost per unit, giving an opportunity to the Company to reap maximum benefits by switching over from costlier grid power to economical power.

Therefore, despite decrease in cement volume during FY21, the economical power consumption increased from 115 Gigawatt hours in FY20 to 122 Gigawatt hours in FY21, accounting for ~ 37% of the total power consumption. Out of 122 Gigawatt hours, 73 Gigawatt hours is green power which is more than ~ 22% of the total power consumption of the Company. To further enhance the share of green power, the Company has recently signed a long-term solar power purchase agreement for purchasing ~ 22 Gigawatt Hours per annum under 'Group Captive Scheme'. The timeline provides a snapshot of various power sourcing initiatives taken by the Company in recent years. As a result of all these initiatives, the Company has been able to reduce its FY21 power cost per unit by ~ 10% as compared to power cost per unit in FY16.