“This shift has the potential to transform these regions into green manufacturing hubs, attracting international climate finance and corporate investments,” reads the report titled RE-powering India’s heavy industries: 20 GW today, 24/7 tomorrow.
Discussing the financial viability of renewable integration suggested, Ember’s Energy Analyst for Asia, Duttatreya Das, explained that heavy industries in India can already source 50% renewable energy affordably. Increasing this share to 80% can raise the costs moderately by up to 1.4x the cost of plain vanilla renewable energy generation. This is because it would mean investing in storage and the challenge of managing surplus generation.
Ember’s modeling shows that increasing renewable energy penetration to 90% will raise costs to around 1.6x the cost of renewable energy generation. At this stage, the system will become increasingly reliant on battery storage, which will come at a cost premium.
Currently, operating on 24x7 renewable energy is not financially feasible since it could cost between INR 8.00 and INR 11.00/unit, which will be about 3.5x more than vanilla renewable energy generation, according to Ember’s projections. Batteries will likely cost 60% of the total cost in this scenario.
Nevertheless, heavy industries can benefit significantly from switching to renewable energy for their use, stresses the report.
In 2024, 6.9 GW of solar open access capacity came online in India for C&I consumers, representing 77% annual increase. This was driven by the cost advantage of renewable energy and regulatory support, but more is required.
“India's industrial sector, one of the hardest to decarbonise, has significant financial incentives to transition through renewable-based electrification. However, policy and institutional barriers must be dismantled to maximise this shift,” said Sustainable Finance Consultant Labanya Prakash Jena of the Institute for Energy Economics and Financial Analysis (IEEFA), who contributed to the report.
The Ember report is available for free download on its website.
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