In a strategic move to expand its renewable energy portfolio and reduce its reliance on fossil fuels, the state-owned Oil and Natural Gas Corporation (ONGC) has successfully secured a bid to acquire PTC India Ltd’s wind power unit for Rs 925 crore. This acquisition marks ONGC’s continued effort to diversify its business interests beyond its core hydrocarbon operations.
PTC Board’s Approval and Pending Shareholder Consent
Recently, the board of PTC approved ONGC’s bid to acquire a 100% equity stake in PEL, valuing the equity at Rs 925 crore. However, this acquisition is still subject to the approval of PTC shareholders, which will determine its finalization.
Insight into PTC Energy Limited (PEL)
PEL was incorporated on August 1, 2008, and boasts a renewable energy portfolio with a total capacity of 288.8 MW. This portfolio includes 50 MW wind power projects in Madhya Pradesh, 50 MW wind power projects in Karnataka, and 188.8 MW wind power projects in Andhra Pradesh. PEL has secured long-term agreements with state distribution companies for its entire 288.8 MW wind power project portfolio. In the fiscal year 2022-23 (from April 2022 to March 2023), PEL reported a profit of Rs 13.88 crore with a revenue of Rs 296.77 crore.
ONGC’s Commitment to Renewable Energy and Carbon Neutrality
ONGC has previously declared its ambitious goal to achieve zero carbon emissions by 2038. To realize this objective, the company has pledged to invest Rs 2 lakh crore, with Rs 1 lakh crore allocated for establishing 10 gigawatts of renewable energy capacity, a green ammonia plant, and offshore wind energy projects by 2030. The remaining investments will follow suit to meet Scope 1 and 2 net zero carbon emission targets, all while continuing its exploration and production of oil and gas.
Understanding Scope 1 and Scope 2 Emissions
Scope 1 emissions are emissions originating directly from sources owned or controlled by a company, while Scope 2 emissions result from the consumption of purchased electricity, steam, or other forms of energy generated upstream from a company’s immediate operations.
ONGC’s Progress in Renewable Energy
ONGC currently has a 189 MW renewable energy generation capacity and aims to escalate this to 10 gigawatts by 2030. The company has already signed a Memorandum of Understanding (MoU) for 5 GW of capacity in Rajasthan and is actively seeking similar-sized projects. Additionally, ONGC plans to establish 25 compressed biogas plants that will convert agricultural residue into gas suitable for running automobiles (CNG) and generating electricity and fertilizer in various industries.
In the fiscal year 2022-23, ONGC produced 19.584 million tonnes (MT) of oil, an increase from the previous year’s 19.545 MT. It is anticipated that oil output will rise to 20.232 MT in the current fiscal year (April 2023 to March 2024) and further increase to 21.265 MT in 2024-25. In terms of natural gas, production is expected to grow from 20.636 billion cubic meters (bcm) in 2022-23 to 20.882 bcm in 2023-24, 22.171 bcm in the following year, and 23.708 bcm in 2025-26.