RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow

This report by Ember analyzes the potential for India's steel, cement, and aluminium sectors to integrate renewable energy (RE) via open access mechanisms. It identifies a 20 GW solar opportunity that could reduce emissions by 29 million tonnes annually and lower production costs for some steelmakers by up to 10%. While sourcing 50% RE is currently cost-effective, the report details the steep financial and technical challenges of reaching 24/7 renewable power, where costs can rise to 3.5 times the cost of standard RE generation due to massive storage and capacity requirements.

• There is a 20 GW solar market opportunity for the steel, cement, and aluminium sectors in India's top five producing states using the green energy open access mode. Steel represents the largest share at 9.4 GW, while cement and aluminium together account for 11 GW. This transition could eliminate 29 million tonnes of emissions annually.
• Renewable energy can significantly reduce operational costs for certain steel production methods. Standalone electric arc furnaces (EAF) could see production cost reductions of up to 10%, while direct reduced iron–arc furnace (DRI-EAF) based steelmaking could see savings between 2% and 5%.
• Odisha and Chhattisgarh are critical hubs for this transition, concentrating nearly 40% of the 20 GW open access solar opportunity. These states have implemented incentives, such as waiving or reducing transmission, wheeling, and cross-subsidy surcharges, to attract green manufacturing.
• Sourcing 50% of electricity from variable RE is currently cost-effective for Indian heavy industries and does not require battery storage. This is achievable through an optimal mix of solar and wind and the use of grid banking to manage minor supply-demand mismatches.
• Increasing RE penetration from 50% to 80% results in a moderate cost increase, reaching up to 1.4 times the cost of standard RE generation. This premium is primarily caused by the need for storage and the difficulties of managing surplus electricity.
• Achieving 24/7 renewable energy is the most expensive phase of the transition, costing up to 3.5 times the cost of standard RE generation, with an average estimated cost of ₹9.5/kWh. This requires massive solar oversizing and battery deployment, with batteries accounting for up to 60% of the total cost.
• The aluminium sector faces a more difficult transition than steel or cement because it relies almost entirely on captive coal power plants (CPPs). RE is unlikely to replace these based on cost alone, meaning the transition will require regulatory mandates like the enforcement of Renewable Purchase Obligations (RPO).
• The Indian government's Green Steel Taxonomy, introduced on December 12, 2024, categorizes steel by emission intensity. Sourcing 100% RE could help the blast furnace-basic oxygen furnace (BF-BOF) route achieve a 4-star rating and the coal-based DRI-EAF route achieve a 3-star rating.
• The EU's Carbon Border Adjustment Mechanism (CBAM) poses a financial risk to Indian exporters. For steel, it could erode corporate profitability by 20-35%, and for aluminium, prices for European buyers could increase by up to 30%.
• Green tariffs offered by distribution companies (DISCOMs) could be a strategic tool for achieving 24/7 RE. They allow industries to meet the final, most expensive portion of their RE demand without the complexity of managing their own storage and oversizing.

APA

Das, D., & Rodrigues, N. (2025). RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow. Ember. https://ember-energy.org/app/uploads/2025/04/RE-powering-Indias-heavy-industries_-20-GW-today-24_7-tomorrow.pdf

Chicago

Das, Duttatreya, and Neshwin Rodrigues. RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow. Ember, 2025. https://ember-energy.org/app/uploads/2025/04/RE-powering-Indias-heavy-industries_-20-GW-today-24_7-tomorrow.pdf.

Wikipedia

{{cite report |last1=Das |first1=Duttatreya |last2=Rodrigues |first2=Neshwin |title=RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow |publisher=Ember |date=2 April 2025 |url=https://ember-energy.org/app/uploads/2025/04/RE-powering-Indias-heavy-industries_-20-GW-today-24_7-tomorrow.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{das2025repowering, author = {Das, Duttatreya and Rodrigues, Neshwin}, title = {{RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow}}, institution = {Ember}, year = {2025}, month = apr, url = {https://ember-energy.org/app/uploads/2025/04/RE-powering-Indias-heavy-industries_-20-GW-today-24_7-tomorrow.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }