India’s Heavy Industries Can Beneficially Tap 20 GW Solar Opportunity – Despite Captive Coal

India’s three big heavy industries—steel, cement, and aluminum—present a 20 GW solar open access market opportunity despite reliance on captive coal generation, according to a new analysis by Ember. This analysis highlights how renewable procurement can slash production costs as well as emissions up to 29 million tonnes of CO₂ annually.

The steel sector alone contributes 9.4 GW to this opportunity, driven by the high cost of grid power that 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%. Cement and aluminum, despite relying on captive coal, contribute another 11 GW.

Green manufacturing: A state-level opportunity

Ember’s analysis finds that heavy industries in Chhattisgarh and Odisha account for nearly 40% 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 surcharge 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 at Ember.

Beyond cost: strategic and regulatory gains

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 EU.

“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.

Towards 24/7 clean power: the next frontier

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.v“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 reaching 80% RE remains feasible, with only a moderate cost increase—about 1.4 times higher than plain solar— due to the need for energy storage and managing surplus power.

Going further to 90% RE raises costs to around 1.6 times that of plain solar. Even so, this remains a reasonable premium when weighed against decarbonisation commitments and growing international mandates for clean supply chains.

Achieving 24/7 (or 100%) RE is challenging at present. Ember’s modelling suggests that achieving full renewable power could cost 8-11 Rs/kWh in India, around 3.5 times the cost of solar. Batteries alone account for 60% of the cost. This level of firming up would require substantial oversizing of RE capacity and a major scale-up in storage.

“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.

The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy