A recent report by Ember shows that solar power can reduce production costs for steel manufacturers. It is up to 10% and is especially for those who are using standalone electric arc furnaces (EAF). These savings are possible because of less dependency on expensive grid electricity.
Solar power can help steel companies production costs by 2-5% which are using the direct reduced iron–electric arc furnace (DRI-EAF) method.
While a standalone EAF setup can save up to 10%. The aluminium industry mostly uses coal-based power plants. Because coal is still cheap and easy to get, switching to solar energy doesn’t save them much money. So, for now, solar energy isn’t as financially helpful for aluminium companies as it is for others like steel.
The report highlights that India’s heavy industries, especially steel, cement, and aluminium, have the potential to use up to 20 gigawatts of solar power through open-access systems. In the steel sector, it is about 9.4 GW, mainly electricity from the grid is expensive.
While steel and aluminum together contribute around 11 GW, because of their coal dominance. Using the full amount of solar energy could help eliminate around 29 million tonnes of CO₂ emissions annually.
Geographically, around 40% of this opportunity is located in Odisha and Chhattisgarh because of their industrial presence and supportive open access policies.
The report suggests that transitioning heavy industries to 50% solar power is cost-effective. But for 80% it requires additional energy storage, which leads to a cost increase.
A full 24/7 renewable supply would require more complex infrastructure and power backup storage that works day and night. It is also up to 3.5 times more expensive. It is still a goal that many companies are working hard toward.
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