20 GW Open Access Solar Opportunity From Heavy Industries In India

There is a 20 GW solar market opportunity in the top 5 producing states under the green energy open access mode of power procurement for steel, cement, and aluminum according to an Ember report. The latest report by Ember on “RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow” found that steel presents the largest opportunity at 9.4 GW, primarily due to its greater reliance on comparably expensive grid power, which can be replaced with open-access solar. 

These top five states according to EMBER are identified as, Odisha (24%), Chhattisgarh (20%), Gujarat (15.4%), West Bengal (13%), and Karnataka (8.5%) accounting for more than 80% of arc furnace-based steel production in India. It added that other elements like Cement and aluminum, despite their dependence on inexpensive captive coal-based generation, collectively represent an 11 GW market. Seizing this opportunity could potentially eliminate 29 million tonnes of emissions annually.

“States such as 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. The shift is already in motion — Odisha is now actively envisioning green industrial parks, setting the stage for an export-driven, low-carbon future in manufacturing,” says Duttatreya Das Energy Analyst for India, Ember.

‘Cost-competitive, near-24/7 renewable energy will power the first wave of industrial decarbonisation and redefine the future of corporate power purchases”, says Neshwin Rodrigues, Senior Energy Analyst, Asia, Ember.

Renewable Power Can Transform Mineral-Rich States Into Green Manufacturing Hubs

Solar Power On Average, Could Slash Production Costs By Up to 10% For Steel Makers

As per the latest findings of the report, “Solar power offers a significant opportunity to reduce operational costs for steel and cement plants across most Indian states. In certain cases, such as standalone electric arc furnaces (EAF) for steelmaking, these savings can account for up to 10% of operational costs. For direct reduced iron–arc furnace (DRI-EAF) based steelmaking, savings range between 2–5%, while for cement manufacturing, the potential is lower. Aluminium, however, does not present a significant cost-saving opportunity due to the abundant captive coal-based generation in place.”

Challenges For Green Tariff

The study also showed, “Unfavorable pricing structures: In most cases, green tariffs have effectively become a premium charged over the existing industrial electricity tariffs rather than states following a standard method as prescribed in the Green Energy Open Access (GEOA) Rules. These additional charges typically range from ₹0.2/kWh to ₹1/kWh for the states that we consider. The green tariffs, for instance, have been set significantly higher than the Average Power Purchase Cost (APPC) of RE procured by DISCOMs.”

While the Ember report makes a good point, the elephant in the room remains the sunk costs involved with thermal power that these industries use, besides the easy access to coal in almost all the states. The two factors together make an accelerated transition much more challenging, especially as coal power delivers multiple revenue side benefits to the state economies as well.