SECI Explores Green Power Procurement Model For Industrial Heat, Including MSME Clusters

New Delhi, Sept 8 (KNN) The Solar Energy Corporation of India (SECI) is exploring a mechanism to aggregate industrial heat demand and procure green electricity for manufacturers, including MSME clusters, as India steps up efforts to strengthen energy security and accelerate industrial electrification amid the West Asia conflict.

The proposal would build on SECI’s existing renewable energy demand-aggregation model and its recent entry into green ammonia. 

Under the mechanism, the agency would assess the combined heating requirements of manufacturers and MSME clusters and use the aggregated demand to float tenders for green power.

The initiative could help make electric furnaces more viable for industries such as steel, cement and aluminium, particularly smaller units that face high upfront costs in shifting to electricity-based heating, reported Financial Express.

Demand Aggregation Could Lower Costs For MSMEs

Large manufacturers can invest in captive renewable power or enter into commercial and industrial power purchase agreements. However, several MSME clusters continue to rely on gas-fired furnaces for industrial heating.

Aggregating their electricity requirements could help achieve economies of scale and lower the cost of green power for smaller industrial units.

The transition would first require these industries to electrify their heating systems and develop economically viable alternatives to gas-based industrial heat, according to an official familiar with the proposal.

Improving Economics Of Industrial Electrification

The proposal comes as India seeks to reduce industrial emissions and meet increasingly stringent global carbon requirements, including the European Union’s Carbon Border Adjustment Mechanism (CBAM).

The economics of industrial heat electrification have also improved. An April 2026 report by Energy Innovation found that electric heat could be cheaper than natural gas and oil across all temperature ranges studied in India.

Electric heat was also cheaper than coal in three of the five temperature bands studied, which together account for around 55 per cent of India’s industrial heat demand.

The report cited utility-scale solar costs of around USD 30 per MWh, rising to about USD 43 per MWh when paired with battery storage.

Industrial Heat Electrification Set To Accelerate

The International Energy Agency’s Renewables 2025 report projects global industrial heat demand to increase 14 per cent between 2025 and 2030, with China and India accounting for more than half of the growth.

Renewable electricity is expected to contribute nearly 80 per cent of the increase in renewable industrial heat consumption during the period.

The share of electricity in global industrial heat consumption is projected to rise from 4 per cent in 2024 to 12 per cent by 2030, driven largely by a threefold increase in electricity consumption for process heat.

The IEA expects renewables’ share in global industrial heat consumption to increase from 12 per cent in 2024 to 16 per cent by 2030.

(KNN Bureau)