India’s heavy industries can tap 20 GW solar opportunity despite captive coal: Ember

Mumbai: India’s three key heavy industries — steel, cement, and aluminium — present a 20 gigawatt (GW) solar open access market opportunity despite reliance on captive coal generation, according to a new analysis by a UK-based energy think-tank, Ember.It highlighted how renewable procurement can slash production costs as well as emissions up to 29 million tonnes of CO₂ annually. 'The steel sector alone contributes 9.4 GW to this opportunity, driven by the high cost of grid power that can be cost-effectively offset by solar. In some setups, like standalone arc furnaces used in secondary steelmaking, solar could reduce production costs by up to 10 per cent. Cement and aluminum, despite relying on captive coal, contribute another 11 GW,' the report added.According to the report, heavy industries in Chhattisgarh and Odisha accounted for about 40 per cent of the assessed 20 GW open access solar market. It said that the high concentration of heavy industries, combined with favourable open access regulations, makes these states one of the most attractive markets. Policies offering discounts on cross-subsidy surcharge and various other charges strengthen the business case for renewable procurement across states.

'Odisha and Chhattisgarh have long been legacy industrial hubs, owing to their proximity to rich mineral reserves. By integrating renewable power, they are well-positioned to begin their transformation to green manufacturing hubs,' said Duttatreya Das, Asia analyst, Ember.

He added that the shift is already in motion with Odisha now actively envisioning green industrial parks, setting the stage for an export-driven, low-carbon future in manufacturing The report noted that sourcing up to 50 per cent of electricity from variable RE is already cost-competitive for heavy industries. However, pushing beyond this threshold requires more advanced strategies.'Cost-competitive, near-24X7 renewable energy will power the first wave of industrial decarbonisation and redefine the future of corporate power purchases,' said Neshwin Rodrigues, senior energy analyst, Ember. Ember's modelling showed that reaching 80 per cent RE remains feasible with only a moderate cost increase—about 1.4 times higher than plain solar— due to the need for energy storage and managing surplus power.Going further to 90 per cent RE raises costs to about 1.6 times that of plain solar. Even so, this remains a reasonable premium when weighed against decarbonisation commitments and growing international mandates for clean supply chains.The report noted that achieving 100 per cent RE is challenging at present. It said that achieving full renewable power could cost ₹8 to ₹11 per unit in India, about 3.5 times the cost of solar. Batteries alone account for 60 per cent of the cost. This level of firming up would require substantial oversizing of RE capacity and a major scale-up in storage.

• Published On Apr 2, 2025 at 11:35 AM IST