3 weeks ago
Renewable energy could save small steelmakers Rs 2.4 crore annually
Small steel factories in India use a lot of electricity to make steel, and electricity is one of their biggest costs.
A new study says these factories could save up to Rs 2.4 crore a year by using clean energy like solar or wind power.
Clean energy also creates less pollution, which is good for the planet.
India is one of the biggest polluters in the world, and steel factories are responsible for a large part of that pollution.
The study says factories could team up and share a solar or wind farm, which makes clean power cheaper and less risky for each company.
Right now, only about 11 out of every 100 small steel factories use renewable power.
Switching is hard because it costs a lot of money, the government rules are complicated, and some places do not have good power lines.
In Gujarat, factory owners are sometimes told to cut their solar power production because the electricity grid cannot handle it.
If factories switch to clean energy, they could also avoid taxes that Europe charges on polluting steel.
So switching to renewable power would help steel factories save money and help keep the air cleaner.
A study finds India's small steelmakers could save up to Rs 2.4 crore per unit annually on power—about a 34% reduction—by switching to renewable electricity.
Small producers make nearly 40% of India's crude steel, and electricity accounts for up to 40% of their operating costs.
The report, 'Powering India's Secondary Steel Transition,' was released August 12 jointly by CII, WWF-India, Climate Catalyst, and JMK Research.
Profit margins at smaller steel companies have been squeezed by rising fuel costs tied to the Iran war, adding urgency to the push for cheaper power.
Only about 11% of small steelmakers use renewable power, held back by high costs, low awareness, government red-tapism, and inadequate grid infrastructure in Gujarat.
- Who
- India's small steel producers, who account for nearly 40% of the country's crude steel output, and the study's publishers—CII, WWF-India, Climate Catalyst, and JMK Research.
- What
- A joint study finds small steelmakers could cut annual power costs by Rs 2.2–2.4 crore per unit (up to 34%) by shifting to renewable electricity.
- Where
- India, including steelmaking clusters in Chhattisgarh and Gujarat.
- When
- The study, 'Powering India's Secondary Steel Transition,' was released on August 12 (Wednesday).
- Why
- To reduce electricity bills—electricity is up to 40% of operating costs—boost profit margins, cut carbon emissions, and help exporters avoid European Union carbon taxes.
Key facts
- Report
- 'Powering India's Secondary Steel Transition' (released August 12)
- Publishers
- Confederation of Indian Industry (CII), WWF-India, Climate Catalyst, JMK Research
- Potential annual savings per unit
- Rs 2.2–2.4 crore ($250,000–$275,000), up to 34% of power costs
- Small producers' share of India's crude steel
- Nearly 40%
- Electricity's share of operating costs
- Up to 40%
- Renewable power usage
- About 11% of small steelmakers vs roughly 22% of India's overall electricity mix
- India's carbon emissions
- About 8.2% of global emissions; steel accounts for 12% of India's total
- India's net-zero target
- 2070, announced by PM Narendra Modi at COP26 in Glasgow in 2021
Quotes
Prabhakar Sharma
Senior researcher at JMK Research
“"A cluster-based approach can fundamentally change how small steelmakers access renewable energy. Aggregating demand through industrial associations makes projects more bankable, enables optimal plant sizing and reduces the investment risk borne by any single unit."”
financialexpress.com
“"The companies are ready to change and have realized that, to maintain profits, they could try to shift to renewable electricity."”
financialexpress.com










