The West Asia war has pushed India to step up energy-security efforts and accelerate the electrification of manufacturing, with state-run Solar Energy Corporation of India (SECI) working on a mechanism to pool industrial heat demand and procure green electricity for replacing gas-fired furnaces.
The plan marks a new use of SECI’s demand-aggregation model. Building on its renewable-energy aggregation model and its entry into green ammonia, the agency is looking to assess the combined heating needs of manufacturers and MSME clusters and use that scale to float tenders for supplying green power.
The move is aimed at making electric furnaces more viable for sectors such as steel, cement and aluminium, particularly smaller units that find it difficult to shift to green power because of high capital requirements.
“As the energy sector evolves, SECI is now looking at new avenues of demand aggregation given its established model for renewable energy demand aggregation. It has already entered in demand aggregation of green ammonia. Aggregation of heat demand from industries is another area SECI is looking at,” an official privy to the development said.
While large manufacturers have the capital to set up captive green-power sources or enter into commercial and industrial power purchase agreements, several MSME clusters continue to depend on gas-based furnaces for heating. Aggregating their requirements could help bring down the cost of green electricity available to smaller units.
The shift would, however, first require these smaller industries to be electrified and alternative sources of heat to be made more attractive, the person added.
The proposal also comes as the government looks to make Indian industries carbon neutral, with the European Union and several other countries introducing more stringent import norms aimed at curbing carbon emissions.
The economics of electrifying industrial heat in India have also been improving. An April 2026 report by Energy Innovation found that electric heat could be cheaper than heat produced using natural gas and oil across all temperature ranges studied in India.
It was also cheaper than coal in three of five temperature bands, which together account for about 55% of the country’s industrial heat requirement. The report cited utility-scale solar costs of about $30 per MWh and solar coupled with battery storage at $43 per MWh.
Globally, industrial heat electrification is expected to accelerate. The International Energy Agency’s Renewables 2025 report projects industrial heat demand to expand 14% between 2025 and 2030, with China and India together accounting for more than half of the increase. Renewable electricity is expected to contribute nearly 80% of the growth in renewable industrial heat consumption over the period.
The share of electricity in global industrial heat consumption is projected to rise from 4% in 2024 to 12% in 2030, driven largely by a tripling of electricity consumption for process heat. The IEA expects the share of renewables in global industrial heat consumption to increase from 12% in 2024 to 16% by 2030.