Simplex Castings Secures 25-Year Solar Power Agreement with Natraj Energy
Simplex Castings Limited, a leading precision metallurgy and casting solutions company, has entered into a 25-year Power Purchase Agreement (PPA) with M/s Natraj Energy. The partnership focuses on securing clean energy through a captive solar power project under the LongTerm Open Access (LTOA) mechanism in Chhattisgarh.Under the agreement, Natraj Energy, a renewable energy partnership firm based in Raipur, will develop, own, operate, and maintain a 5.5 MWp gridconnected solar power plant. This facility is designated to supply renewable electricity to Simplex Castings' manufacturing operations at Bhilai and Tedesara through the open-access captive consumption mechanism.
The transition to solar energy is expected to significantly improve the Company’s cost structure, with an anticipated annual energy cost savings of close to ₹2.16 Crores over the life of the agreement.
The shift in power sourcing involves a substantial reduction in unit costs for Simplex Castings. Prior to this arrangement, the company sourced power at ₹9 per unit from the conventional grid. Through the new solar power agreement, Simplex Castings is projected to achieve a saving of close to ₹3 per unit, which effectively brings its net energy cost down to ₹5-6 per unit for the same consumption pattern.
The contract has been structured on a cash-neutral basis, enabling the company to participate in the project economics without requiring material upfront capital outlay.
Natraj Energy will bear full responsibility for various aspects of the project, including statutory and regulatory approvals, grid connectivity, longTerm open access arrangements, and ongoing operations and maintenance of the solar facility throughout the 25-year period.
Commenting on this development, Mr. Ketan Shah, Chairman and Executive Director of Simplex Castings Limited, stated that the long-term solar power arrangement represents a significant step in the company’s sustainability journey. He added that securing clean energy at a predictable tariff over two decades is strengthening their commitment to responsible manufacturing. "The annual savings of approximately ₹2Crores reflect the tangible financial value of this initiative which adds to our margins, alongside its environmental benefits," he stated, expressing anticipation for a productive partnership with Natraj Energy.
Financial structure comparison related to the new solar power arrangement:
| Parameter | Previous Conventional Grid Sourcing | New Solar Power Agreement | Difference / Benefit |
|---|---|---|---|
| Power Unit Cost (Prior) | ₹9 per unit | N/A | Base Rate |
| Net Energy Cost (Post-Agreement) | N/A | ₹5-6 per unit | Significant Reduction |
| Savings Potential Per Unit | N/A | Close to ₹3 per unit | Cost Benefit |
Simplex Castings Limited is an ISO9001:2015 and ISO14001:2015 Certified company, operating manufacturing facilities that include a Cast Iron Foundry and Heavy Engineering & Fabrication Plant.
Stock Price Movement
Simplex Castings Ltd closed on a Monday, settling at ₹490.40, marking a decline of 3.30%.Shares for the company experienced volatility throughout the session, trading between an intraday low of ₹483.25 and a high of ₹504.95.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.
Last edited by a moderator: