India’s heavy industries can benefit from tapping into the 20 GW solar opportunity: Report

Mumbai: India’s three big heavy industries—steel, cement, and aluminium—present a 20 GW solar open access market opportunity despite reliance on captive coal generation, according to a new analysis by Ember, an independent energy think tank that aims to accelerate the clean energy transition with data and policy.

This analysis highlights how renewable procurement can slash production costs as well as emissions of up to 29 million tonnes of carbon-dioxide annually.

The steel sector alone contributes 9.4 GW to this opportunity, primarily due to its greater reliance on comparably expensive grid power which can be replaced with open-access 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.

Ember’s analysis finds that heavy industries in Chhattisgarh and Odisha account for nearly 40 per cent of the assessed 20 GW open-access solar market. 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 surcharges and various other charges strengthen the business case for renewable procurement across states.

“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,” said Duttatreya Das, Asia Analyst, Ember.

Renewable adoption also unlocks strategic benefits for industries. Lower emissions intensity can qualify steelmakers under India’s new green steel taxonomy, unlocking access to markets that provide a green premium, and enhancing long-term competitiveness, especially in regions preparing carbon border taxes like the European Union. 

“India’s industrial sector, one of the hardest to decarbonize, has significant financial incentives to transition through renewable-based electrification. However, policy and institutional barriers must be dismantled to maximize this shift,” said Labanya Prakash Jena, Sustainable Finance Consultant, IEEFA.

Sourcing up to 50 per cent of electricity from variable Renewable Energy (RE) is already cost-competitive for heavy industries. However, pushing beyond this threshold requires more advanced strategies. “Cost-competitive, near-24/7 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.