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India’s Heavy Industries Offer 20 GW Solar Open Access Potential Amid Coal Dependence

India’s steel, cement, and aluminium industries collectively present a 20 GW solar open access market opportunity, despite their substantial reliance on captive coal power, according to a recent report by energy think tank Ember. A shift towards renewable energy in these sectors could potentially reduce carbon emissions by up to 29 million tonnes annually.

The steel industry holds the largest share of this opportunity at 9.4 GW, largely due to high grid electricity costs, which can be mitigated through open access solar adoption. Meanwhile, the cement and aluminium sectors account for the remaining 11 GW, even though they are heavily dependent on captive coal power for operations.

For certain industrial processes, solar power adoption could lower production costs. In secondary steelmaking, specifically in standalone electric arc furnaces (EAFs), solar energy could reduce costs by up to 10%. Meanwhile, in direct reduced iron (DRI) and EAF-based steelmaking, savings could range between 2-5%. However, in the aluminium sector, financial incentives remain limited due to the industry's entrenched reliance on captive coal-based power generation.

Notably, nearly 40% of the identified 20 GW solar opportunity is concentrated in Odisha and Chhattisgarh—two major industrial hubs. These states have introduced favorable open access policies, such as waivers on transmission and wheeling charges, and cross-subsidy surcharges, which facilitate industrial solar adoption.

"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 into green manufacturing hubs," said Duttatreya Das, Energy Analyst for India at Ember.

The report highlights the urgent need for India's heavy industries to accelerate their transition to renewable energy, not only to cut emissions but also to enhance long-term cost competitiveness in a global economy increasingly focused on sustainability.