Indian Heavy Industries Present 20 Gw Open Access Solar Opportunity

From pv magazine India

Indian heavy industries, including steel, cement, and aluminum, present a 20 GW solar open access market opportunity despite relying on captive coal generation, according to a new analysis by Ember.

The Ember report said the steel sector alone accounts for 9.4 GW of this opportunity, mainly due to its dependence on expensive grid power that could be replaced with open access solar. Cement and aluminum, despite their reliance on lower-cost captive coal generation, represent a combined 11 GW market.

Capturing this potential could cut production costs and eliminate 29 million metric tons of emissions annually, the report said.

The open access mechanism allows large industrial consumers to buy renewable power directly from producers, bypassing electricity distribution companies (discoms). Renewable power is transmitted from distant plants to industrial facilities using the common grid infrastructure.

Solar power could lower production costs by as much as 10% for some steelmakers. “In some setups, such as standalone arc furnaces used in secondary steelmaking, solar could reduce costs by up to 10%,” the report said.

Ember’s analysis said heavy industries in Chhattisgarh and Odisha account for nearly 40% of the assessed 20 GW solar open access market. A high concentration of heavy industries and favorable open access regulations make these states among the most attractive markets. Policies that reduce cross-subsidy surcharges and other fees further strengthen the case for renewable procurement.

“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 at Ember.

Beyond cost saving, 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 at IEEFA.

Sourcing up to 50% 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 at Ember.

Ember’s modelling shows that sourcing 50% variable renewable energy is possible without integrating storage and is already cost-effective for heavy industries in India today. Increasing renewables penetration from 50% to 80% increases the cost to up to 1.4 times the cost of plain vanilla solar generation due to the need for energy storage and managing surplus power. Going further to 90%, renewables raise costs to around 1.6 times that of plain solar.

“Renewables are already a cost-effective solution for Indian industries, and 24/7 clean power is the benchmark for the future of renewable procurement. This report highlights that companies can make significant progress toward round-the-clock renewable supply today, with further innovation in storage, flexible demand, and market design needed to achieve full 24/7 coverage at competitive rates,” said Killian Daly, executive director at EnergyTag.

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