Indian Steel Industry & Solar Energy

India is the world’s second-largest steel industry and third-largest consumer of steel. India’s steel industry is considerably more diverse than that of many other nations, having a vast range of primary and secondary steelmaking facilities of various sizes. The Blast Furnace – Basic Oxygen Furnace (BF-BOF), coal-based Direct Reduction (DR), gas-based DR, Electric Induction Furnace (EIF), and Electric Arc Furnace are some of the technologies now in use (EAF).

The Indian steel industry is unusual in that it uses coal-based direct reduction to meet very localized steel demand. India’s reliance on this technique is fueled by the country’s low-cost local coal deposits, as well as a dearth of domestic natural gas and high-quality coking coal. The steel sector, like that of every other industrializing nation, is critical to India’s economy, generating about 2% of GDP and employing around 2.5 million people in steel and associated industries (MoS 2019). This section covers current production data, energy and raw material consumption, market structure, and steel demand.

Indian Steel Industry

Demand & Market Size Of Steel Industry

In 2018, India’s steel consumption reached 98 Mt, up 7.5% over the previous year (MoS 2019). Despite this rapid expansion, India’s real steel use per capita is just 64 kg of finished steel equivalent, much below the global average of 224 kg. Steel consumption in developed economies tends to peak at about 500 kg per capita, implying that Indian steel demand has room to expand as the country develops.

The Ministry of Steel (MoS) released the National Steel Policy in 2017 to stimulate faster growth and a stronger focus on energy-efficient techniques in the steel sector. The policy sets forth production and demand growth objectives through 2030. Steel production capacity was set at 300 Mt during 2030–31, corresponding to 158 kg of steel usage per capita (MoS 2017).

In FY21, crude steel and finished steel output were 102.49 MT and 94.66 MT, respectively. Crude steel output is anticipated to reach 112-114 MT (million tonnes) in FY22, up 8-9% YoY, according to CARE Ratings. In FY21, finished steel consumption totaled 93.43 MT.

The total amount of finished steel produced in May 2021 was 7.8 MT.

SAIL’s crude steel output was 1.30 MT in June 2021, while its saleable steel production was 1.27 MT.

In FY21, completed steel exports and imports were 10.79 MT and 4.75 MT, respectively. India’s exports increased by 121.6 percent YoY in April 2021 compared to April 2020. India exported 8.24 MT of finished steel in FY20.

Energy & Raw Material Consumption in Steel Industry

The iron and steel industry is the most energy-intensive sub-sector within the industry, accounting for more than 20% of total energy consumption. The brick, cement, petrochemical, and fertilizer industries are among the other sub-sectors in India that use a lot of energy.

Coal is the primary source of energy for the steel industry, followed by electricity and natural gas. Although coal is abundant and inexpensive, substantial differences in quality can make the steelmaking process more difficult to manage. India has a limited supply of coking coal, therefore it imports a lot of it from other countries, mostly Australia.

The primary source of electricity is still coal, and it will continue to be so for the foreseeable future. With plans to install 175 GW by 2022 and 450 GW by 2030, the Indian government has set ambitious targets for renewable energy penetration. Due to the higher expense and unreliability of the electrical grid, several corporations have built massive captive power plants, or electricity produced on-site.

The iron and steel industry is no exception, with captive plants supplying 44% of the industry’s power in 2015–16. Coal, natural gas, and diesel account for 91%, 7%, and 1%, respectively, of this captive generation (CEA 2017). Captive power makes more economic sense than the electrical grid, but it is still a costly alternative for power generating. As a result, the profitability of electro-intensive steel manufacturing routes is jeopardized.

India’s natural gas reserves are limited, and imports are costly. Domestic natural gas is only used in a few areas that the government has designated. The fertilizer, electricity, transportation, and cookery (CGD) industries are among them. Because of restricted supply, the few iron and steel factories that are intended to utilize natural gas have been operating considerably below their ideal utilization factors. Natural gas’s future significance in India’s steel industry is unclear.

When compared to worldwide standards, the Indian iron and steel business is more inefficient in terms of energy use per unit production. While a few facilities have recently been updated to the finest available technology to increase their efficiency, the industry as a whole has a lot of room for energy savings.

Energy Consumption:


12.5 X 106 Kcal per ton of Salealble Steel 

Blast Furnace 54%
Sintering 08%
Coke Ovens 12%
Cold Rolling 05%
Hot Rolling 09%
Steel Making 09%
Slabbing & Blooming 03%

Why Solar?

Steel needs energy and the energy system needs steel

In our society, steel is firmly ingrained. Steel is used extensively in the construction of buildings such as houses, schools, hospitals, bridges, automobiles, and trucks, to mention a few. Steel will play an important role in the energy shift, as solar panels, wind turbines, dams, and electric cars all rely on it to some extent. Steel demand has more than tripled since 1970, and it is expected to continue to climb as countries develop, urbanize, consume more commodities, and expand their infrastructure.

The iron and steel industry ranks first in terms of CO2 emissions and second in terms of energy consumption among heavy sectors. The iron and steel industry emits 2.6 gigatonnes of carbon dioxide (Gt CO2) per year, accounting for 7% of global energy system emissions and more than all road freight emissions combined. Steel is now the greatest industrial user of coal, accounting for around 75% of total energy consumption. Coal is used to create heat and to manufacture coke, which is essential for the chemical processes that lead to the production of steel from iron ore.

Sustaining projected demand growth while reducing emissions poses immense challenges

Steel consumption is expected to rise by more than a third between now and 2050. The Covid-19 issue has wreaked havoc on global supply lines, resulting in a projected 5% drop in global crude steel output in 2020 compared to 2019. Based on robust output levels in the first half of the year, the People’s Republic of China (“China”) defies the global trend, with production expected to rise in 2020. In our baseline predictions, the steel sector recovers to a solid growth trajectory after a short-term worldwide downturn. Despite a greater percentage of less energy-intensive secondary manufacturing, CO2 emissions are predicted to rise to 2.7 Gt CO2 per year by 2050, which is 7% more than today, unless targeted steps to cut steel consumption were practicable and an overhaul of the present production fleet are taken.

Steel is one of the most recyclable commodities currently in use. While iron ore accounts for around 70% of the metallic raw material inputs to steelmaking worldwide, the remainder is provided in the form of recycled steel scrap. Steel made from scrap needs around one-eighth of the energy used to make steel from iron ore, and it is mostly in the form of electricity rather than coal. As a result of this benefit, recycling rates are high (around 80-90 percent globally). Scrap, on the other hand, cannot meet the sector’s raw material input requirements on its own since steel output now is higher than it was when the goods being recycled were made. As a result, recycling alone will not be sufficient to cut emissions from the industry to the levels required to fulfill climate targets.

If energy and climate targets are to be met, existing infrastructure cannot be overlooked. Over the last two decades, global crude steel production capacity has more than quadrupled, with China accounting for three-quarters of the increase and developing nations accounting for around 85 percent of total capacity today. Because of this fast expansion, the worldwide blast furnace fleet is very young, with an average age of about 13 years2, or less than a third of the normal life of these units. These and other steel sector assets, if run until the end of their normal life under present conditions, may produce about 65 Gt CO2 in cumulative emissions. This would deplete the majority of the CO2 budget available for a long-term transformation in the sector, leaving little room for the capacity expansions that would be necessary in the coming decades.

Governments must assist in speeding up the process.

Governments will play a key role in ensuring that the iron and steel sector transitions in a sustainable manner. Policy portfolios will be different, but the following suggestions are a good place to start for those looking to make a difference and speed up the transition:

  • Establish a long-term and increasing signal for CO2 emission reductions.
  • Manage existing assets and near-term investment.
  • Create a market for near-zero emissions steel.
  • Support the demonstration of near-zero emission steelmaking technologies.
  • Accelerate material efficiency.
  • Increase international co-operation and ensure a level global playing field.
  • Develop supporting infrastructure for near-zero emission technologies.
  • Track progress and improve data collection.


With this blog, we have tried to show you how energy and carbon intensive the steel sector of India is. By adopting solar, not only CO2 emission can be lowered but at the same time how much load can be shifted from the traditional power generating sources of India.

How Can We Help?

Hope this information about “Solar Solution For Steel Industry” helps you to design your solar solution for the steel production mill as per your requirement.

If you are planning to start a solar business or install a solar solution, you can connect with Ornate Solar to get the best assistance with the best prices for solar panels and inverters. We are the official partner of Canadian Solar panels & Renewsys solar panels in India. We are also the official distributor of SolarEdge inverters with DC optimizers, Enphase microinverters, Fronius On-Grid Inverters, and Havells solar inverters in India.

For more information, please give us a call at 011 4353 6666.

raman ornate

About The Author

Raman Kumar is Sr. Project Manager CUM Technical Head with Ornate Solar. Professional with a B. Tech in Electrical and Electronics Engineering. Having 6+ Years of experience in Design and Project Management with a demonstrated history of working in the renewables industry.

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raman ornate

About The Author

Raman Kumar is Sr. Project Manager CUM Technical Head with Ornate Solar. Professional with a B. Tech in Electrical and Electronics Engineering. Having 6+ Years of experience in Design and Project Management with a demonstrated history of working in the renewables industry.