India to Power Factories with Green Energy Bulk Buys

India is spearheading an initiative to consolidate the energy requirements of its vast number of small and medium factories, aiming to facilitate a cost-effective and secure shift towards green electricity. The state-run Solar Energy Corp. of India (SECI) is formulating a strategy to map and aggregate energy demands, particularly for industrial heat generated through manufacturing processes.

This demand aggregation will enable SECI to issue tenders for green power supply, securing renewable electricity at more competitive prices. The plan is designed to support smaller businesses that often face limitations due to infrastructure and high capital expenses. By pooling demand, industries like steel, cement, and aluminium, along with smaller enterprises, can reduce their operational costs and ensure stable energy supplies.

The initiative becomes particularly relevant as electricity constitutes a significant portion of manufacturing expenses in India. It also addresses a backlog of unsigned power purchase agreements for green energy. Experts note that while large corporations can establish captive renewable sources, MSMEs can benefit substantially from aggregated procurement, especially for gas-based heating furnaces.

Transitioning to electric furnaces involves considerable capital expenditure for smaller industries. Key factors for successful adoption include ensuring uninterrupted power supply, offering competitive electricity rates, and providing attractive return on investment. Potential government support through capital subsidies and concessional loans is being considered to facilitate this green transition.