Renewable Power Could Save Small Steelmakers Rs 24 Million a Year
POWER & RENEWABLE ENERGY

Renewable Power Could Save Small Steelmakers Rs 24 Million a Year

A joint study released on 12 August 2026 by the Confederation of Indian Industry, WWF-India, Climate Catalyst and JMK Research finds that small steel producers could reduce costs and carbon intensity by shifting from grid electricity to renewable power. The study notes that secondary or small steel producers account for nearly 40 per cent of India' s crude steel production and face high electricity bills.

It estimates that renewable electricity could lower annual power costs by about Rs 22 million (Rs 22 mn) to Rs 24 million (Rs 24 mn) per unit, representing a reduction of up to 34 per cent in annual power costs. Electricity accounts for up to 40 per cent of operating costs for many smaller producers, and rising fuel prices have squeezed profit margins, increasing the appeal of cheaper power sources.

The authors advocate joint ownership or cluster-based models to aggregate demand and make projects more bankable, enabling optimal plant sizing and spreading investment risk across units. The report observes that only about 11 per cent of smaller steelmakers currently use renewable power, compared with roughly 22 per cent in India' s overall electricity mix, indicating room for scaled deployment.

On the emissions front, the study situates the sector within national targets, noting that India accounted for approximately 8.2 per cent of global greenhouse gas emissions in recent assessments and that steel contributes about 12 per cent of the country' s total emissions. The government' s net zero aim for 2070 reinforces the strategic importance of decarbonising industrial power.

The report also identifies barriers to adoption, including high capital costs at an individual level, limited awareness and regulatory hurdles related to renewable ownership. Grid constraints and curtailment in some states, notably Gujarat, are cited as practical obstacles; easing these impediments could accelerate adoption and help exporters manage evolving carbon-related trade measures.

A joint study released on 12 August 2026 by the Confederation of Indian Industry, WWF-India, Climate Catalyst and JMK Research finds that small steel producers could reduce costs and carbon intensity by shifting from grid electricity to renewable power. The study notes that secondary or small steel producers account for nearly 40 per cent of India' s crude steel production and face high electricity bills. It estimates that renewable electricity could lower annual power costs by about Rs 22 million (Rs 22 mn) to Rs 24 million (Rs 24 mn) per unit, representing a reduction of up to 34 per cent in annual power costs. Electricity accounts for up to 40 per cent of operating costs for many smaller producers, and rising fuel prices have squeezed profit margins, increasing the appeal of cheaper power sources. The authors advocate joint ownership or cluster-based models to aggregate demand and make projects more bankable, enabling optimal plant sizing and spreading investment risk across units. The report observes that only about 11 per cent of smaller steelmakers currently use renewable power, compared with roughly 22 per cent in India' s overall electricity mix, indicating room for scaled deployment. On the emissions front, the study situates the sector within national targets, noting that India accounted for approximately 8.2 per cent of global greenhouse gas emissions in recent assessments and that steel contributes about 12 per cent of the country' s total emissions. The government' s net zero aim for 2070 reinforces the strategic importance of decarbonising industrial power. The report also identifies barriers to adoption, including high capital costs at an individual level, limited awareness and regulatory hurdles related to renewable ownership. Grid constraints and curtailment in some states, notably Gujarat, are cited as practical obstacles; easing these impediments could accelerate adoption and help exporters manage evolving carbon-related trade measures.

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