Solar power can save up to 10% for steel sector companies: Ember report

The report highlighted that the greatest benefits are seen in standalone electric arc furnace (EAF) steelmaking, where solar energy can significantly cut operational expenses.

The report added that savings range between 2 and 5 per cent for direct reduced iron arc furnace (DRI-EAF) steel production.

"For direct reduced iron-arc furnace (DRI-EAF) based steelmaking, savings range between 2-5 per cent, while for cement manufacturing, the potential is lower," the report added.

The steel sector alone contributes 9.4 GW to this opportunity, driven by the high cost of grid power, which can be cost-effectively offset by solar. In some setups, like standalone arc furnaces used in secondary steelmaking, solar could reduce production costs by up to 10 per cent, the report added.

It highlighted that the aluminium industry is less likely to experience similar cost reductions due to its heavy reliance on coal-based energy sources.

"Aluminium, however, does not present a significant cost-saving opportunity due to the abundant captive coal-based generation in place," the report added.

Going forward, the report says that India's three big heavy industries--steel, cement, and aluminium--present a 20 GW solar open access market opportunity despite their reliance on captive coal generation.

Cement and aluminium, despite relying on affordable captive coal-based generation, together represent an 11 GW market. Seizing this opportunity could potentially eliminate 29 million tonnes of emissions annually, according to the report.

Among other observations, the report highlights that on a regional scale, over 40 per cent of the 20 GW open-access solar power opportunity for heavy industries is centred in only two states: Odisha and Chhattisgarh.

These states have long been major industrial hubs for India's steel and aluminium manufacturing.

Recent exemptions from open access costs have increased the appeal of renewable energy in these areas, making it a commercially feasible sourcing alternative for these companies.

This transition has the potential to transform these areas into green manufacturing hubs, drawing worldwide climate funding and corporate investment.

The think tank says that renewable energy can play an important role in aligning steel production with India's evolving green steel taxonomy, allowing certain steel manufacturing paths to meet low-emission intensity targets.