Solar Adoption Benefits for Steel Industries

India has the second-largest steel industry in the world and is the third-largest consumer of steel as per the World Steel Association. The steel industry is a huge market, especially in India. It is a major contributor to the Indian economy, contributing about 2% of GDP and employing around 2.6 million in steel and steel-associated industries.

India’s steel consumption has risen by over 11%, 119 million tonnes in FY 2023, compared to 105 million tonnes in FY 2022. The steel and iron industry are the most energy-intensive sectors in the country accounting for more than 20% of the energy, as per the latest report released by ICRA.

The steel industry produces 1.4 tonnes of CO2 per ton of steel produced. As our country progresses towards Net Zero by 2070, drastic changes should be made in industries like steel manufacturing to reduce the impact of carbon emissions from the industry.


Energy Intensity in Steel Industries

One can easily assume the steel industry is a very energy-intensive business, and it is. According to estimates, to manufacture one ton of saleable steel approximately 12.5 x 10^6 kcal has to be utilized as per Indian standards. By installing solar power system on their non-utilized spaces, such as the roof/ground, they will not only save energy costs but also contribute to a greener future.

Coal is the primary source of energy for this industry followed by electricity and natural gas. Although Coal is abundant and inexpensive, the quality of coal plays a huge part in the ease of operations in industries.

The energy sources used by industries to produce steel (in the year 2019)

  • Coal: 627Mtoe/ year
  • Oil: 10 Mtoe/ year
  • Gas: 21 Mtoe/ year
  • Electricity 106 Mtoe/ year
  • Imported Heat:14 Mtoe/ year
  • Bioenergy: 6 Mtoe/ year

India being a fast-growing nation, requires more steel to supplement its growth, especially for the infrastructure development of the country. The demand for steel has more than tripled since 1970, and as per the latest reports it has recorded a growth of 13% in the last fiscal year. With the predicted rise in demand for steel, the sector will need to ramp up its production and is expected to double its production capacity by 2031, which in turn will result in higher demand for energy.

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