India aims for 68% renewable and nuclear power capacity by 2032 - what should aluminum smelters do about energy mix?

India's reliance on coal and why so

Not judging, but Indian aluminum industry is still heavily reliant on coal-fired electricity for its operations. Reasons are many, such as the need for round –the-clock power supply.  An aluminum smelter typically needs 14-15 megawatt-hours of power per tonne of aluminum throughout the day, leaving no room for interruptions. Renewable sources, such as solar and wind, although cheaper per unit (INR 4–4.3 per kWh) than coal (INR 6 per kWh), are inherently intermittent. As Tata Power CEO Praveer Sinha pointed out, India's climate variability is one of the main reasons for its reliance on coal or fossil-fueled electricity. Moreover, India has abundant and easy availability of coal, and thus smelters for decades have coal-integrated power infrastructure. These facilities cannot be retrofitted or replaced overnight. So, what should aluminum industry do now when the nation is eyeing to replace coal-fired power plants with renewable energy capacity?

India's rapid shift to renewables and mandatory policy push

According to Mr Sinha, India's target is to let go of coal-fired plants which are more than 40 years old, inefficient, and polluting after the scheduled renewable energy projects come online in next five years. Already India's non-fossil fuel energy, including renewable and nuclear energy, accounts for more than half of the country's total installed capacity of 501 GW, as of September 2025. According to the Ministry of Power, India's non-fossil fuel capacity is 256.09 GW, in contrast to fossil fuel capacity of 244.80 GW, which is 49 per cent of the total.

By 2032, the aim is to take the carbon-free capacity to 615.955 GW, with nuclear contributing 19.680 GW, large hydro 62.178 GW, solar 364.566 GW, wind 121.895 GW, small hydro 54.50 GW, biomass 15.500 GW, and pump storage power of 26.686 GW. In contrast, only 90 gigawatts of additional coal-fired electricity capacity is planned to be added to the existing 244 GW of fossil fuel capacity, while one-fourth of the 290 fossil-fueled electricity plants that are more than 25 years old will be replaced with renewable. In simple terms, India aims to have 900.422 GW of installed power capacity by 2032, of which only 284.467 GW of capacity will be fossil-fueled.

Alongside the shift to renewable energy in national power mix, India is also introducing policies that require captive power consumers to follow suit. In August 2025, the Government issued an order for captive power consumers to derive 29.91 per cent of electricity from renewable sources and scale it up to 43.33 per cent by FY2030. This again indicates industries like aluminum to adopt renewable energy, even as India simultaneously aims to increase aluminum production by six-fold from the present 4.2 million tonnes. So, now it is to see how these two goals, which include massive industrial expansion and deep decarbonisation, come to an alignment.

India's current status in Green Aluminum curve

The push to adopt renewable energy through the Government's mandate is for transitioning to "Green Aluminum". There is currently no universally accepted definition of green aluminum, but the most widely-used benchmark is a carbon footprint below 4 tonnes of CO2 per tonne of metal produced. At present, most of the aluminum smelters in India emit 17 to 20 tonnes of CO2 per tonne of aluminum. According to available data and industry practices, it is estimated that less than 10 per cent of India's aluminum output is considered green metal. Energy mix is one of the major factors contributing to the low share of green aluminum in India. While in other major aluminum-producing countries, coal accounts for 60 per cent of the energy mix, in India, the percentage is 85 per cent.

Financial reality – clean power will cost more, at least for now

While it is clear that India needs to increase the share of renewable energy in the mix, but for this a level of infrastructure is required which ultimately boils down to cost. Since solar and wind power is intermittent, smelters will need firming solutions, such as energy storage systems, power modulation technologies, and hybrid power procurement strategies. Then if smelters draw electricity through the grid via open-access, green attribute purchases, or RECs, then they have transmission charges, banking charges, and cross subsidy charges. According to CEEW, to adopt all these infrastructure, Indian aluminum smelters would require an additional capital expenditure of INR 2,18,241 lakh crore (USD 29 billion and an annual operational expenditure of INR 26,049 crore (USD 3.5 billion). And then consequently, net-zero aluminum will be 61 per cent more expensive than conventional aluminum.

Solution?

Solution is the middle path – increase renewable share and not abandon coal completely. The global energy mix indicates that Indian smelters do not need to leap to 100 per cent renewable power immediately. Rather, they must gradually increase the renewable share while maintaining firm backup. For this, phased approach is required and requires collaboration and government support. If aluminum is to become a strategic "Green Metal" for India, policy must go beyond mandates. Since majority of aluminum smelters are in states that do not have optimal wind power potential, state governments must reduce or remove open-access charges for renewable power. Governments must also support in developing R&D ecosystem, including pilot projects for CCUS across all geographies.

Industry efforts have begun but certainly need scaling. In 2021, Vedanta procured 2 billion units of renewable energy for its smelter in Jharsuguda. In 2023, the company signed a long-term agreement to source 1,335 MW of renwable energy to power smelters in Odisha and Chhattisgarh. In 2022, Hindalco entered into a commercial agreement with Greenko Group to build 375–400 MW of solar + wind capacity, supplying round-the-clock (RTC) carbon-free power to its smelter in Odisha.

Conclusion

India's rapid expansion in renewable energy capacity leaves no ambiguity that heavy industries like aluminum need to accelerate their transition. But this cannot be simplistic. Coal cannot be abandoned instantly, and renewables cannot shoulder smelters' electricity needs without technologies and supportive policy. So, what requires is a phased, economically viable rebalancing of energy mix, backed by strong government incentives and industry-government collaboration.