Rajkot foundries can cut annual power bills by ₹2.2 crore each through cluster solar, report says

Rajkot — Foundries in the Rajkot cluster could significantly lower electricity costs by switching to cluster-based renewable procurement, a report released at the Confederation of Indian Industry (CII) Green Steel Summit on 12 August has found. The study identifies Rajkot as one of five secondary-steel clusters in India best positioned to adopt renewable electricity, with a representative foundry able to reduce its annual power bill by around ₹2.2 crore through a 5 megawatt (MW) group captive solar project.

Study, sponsors and methodology

The report, titled

"Powering India's Secondary Steel Transition: The Business Case for Cluster-Based Renewable Electricity Procurement"

, was conceptualised by the India Green Steel Coalition (IGSC), a joint initiative of WWF-India and the CII-Godrej Green Business Centre (CII-GBC). JMK Research & Analytics carried out the study with support from the India Green Steel Network (IGSN), a platform convened by Climate Catalyst. Findings were presented at the CII Green Steel Summit in Raipur. The researchers evaluated 22 secondary-steel and foundry clusters across India using a Renewable Energy Attractiveness Index. The index scored clusters on state policy, cost-saving potential, electricity consumption, untapped renewable market potential and land availability. Rajkot, along with Raipur, Belgaum, Shimoga and Bhavnagar, emerged among the top five clusters for renewable electricity adoption.

Financial case for cluster solar

According to the report, a representative foundry in Rajkot participating in a 5 MW group captive solar arrangement would need an estimated investment of about ₹1.4 crore and could save approximately ₹2.2 crore per year on electricity — yielding a payback within the first year of investment. The study highlights electricity as a major cost input for secondary-steel MSMEs; power can represent up to 40 per cent of operating costs for units in the sector.

Parameter	Estimate (Rajkot representative foundry)
Project size	5 MW (group captive solar)
Estimated investment	₹1.4 crore
Annual electricity savings	₹2.2 crore
Payback period	Within 1 year (as modelled)

• The report covers the wider secondary-steel sector: electric-arc and induction-furnace producers, re-rolling mills, forging units and foundries.
• Cluster-based procurement offers economies of scale and can leverage available land and state policy incentives, according to the index framework.
• Rajkot’s ranking reflects favourable combinations of demand, land potential and policy context relative to other clusters assessed.

Local implications and industry perspective

For Rajkot’s sizeable foundry community — a key supplier to engineering, auto components, pumps and apparel machinery sectors across Gujarat and beyond — the report’s numbers point to a potentially rapid improvement in competitiveness. Lower power costs would reduce operating margins and could free capital for technology upgrades or labour investments. Cluster-based group captive models also reduce the administrative and financial burden on individual MSMEs compared with installing and owning standalone capacity. The study stops short of prescribing a single policy route but underscores the business case for collective procurment mechanisms, which can be particularly relevant where land parcels and demand concentration are suited to shared projects. Rajkot industrial associations and energy consultants may use these findings to structure investment proposals, negotiate with developers and seek state-level facilitation.

Next steps and questions for stakeholders

Key actions implied by the report include: mapping willing industrial buyers in Rajkot; assessing available land and grid connectivity for a 5 MW or larger captive facility; and evaluating state-level rules on open access and group captive status. For smaller foundries, pooled demand aggregation and third-party developer models could lower upfront capital requirements. While the study models a representative foundry, actual savings will vary by consumption pattern, tariff structure, and project design. Detailed feasibility studies and pilot projects will be required in Rajkot to validate the model assumptions and translate the potential savings into implementable investment plans. The report’s presentation at the CII Green Steel Summit signals growing institutional focus on decarbonising India’s secondary-steel sector. For Rajkot — where energy is a significant cost driver for MSMEs — the findings provide an evidence-backed starting point for industry, financiers and policy makers to consider cluster-level renewable deployment as a near-term, high-impact intervention.