ANNOUNCEMENTS
India’s formal commitment to achieve net-zero greenhouse gas (GHG) emissions by 2070 marks a pivotal juncture in its developmental trajectory, calling for an urgent reconfiguration of energy use in its most emission-intensive sectors. Among these, the industrial sector stands out, accounting for over 30% of India’s total energy consumption and emitting a significant share of both direct and indirect carbon emissions. This energy intensity primarily stems from fossil fuel combustion for electricity and thermal energy, as well as process-related emissions in core industries such as cement, steel, chemicals, fertilisers, textiles, and general manufacturing. The intersection of industrial growth, economic competitiveness, and climate resilience therefore places industrial decarbonisation at the heart of India’s long-term energy and climate strategy.
In this context, corporate renewable energy (RE) procurement—defined as the acquisition of renewable electricity by industries either voluntarily or under compliance mechanisms—has emerged as a key lever in supporting industrial decarbonisation. Unlike conventional approaches focused on utility-scale public procurement, corporate-led RE procurement offers decentralized, demand-driven pathways for clean energy adoption. This trend is increasingly catalyzed by falling RE tariffs, ESG mandates, investor scrutiny, global supply chain pressures, and long-term economic viability. However, despite the growing enthusiasm for RE procurement, its implementation across India remains uneven due to a fragmented and inconsistent policy environment at the state level.
This thesis undertakes a comprehensive secondary research-based investigation into the effectiveness, challenges, and enablers of corporate RE procurement policies in India, with a particular focus on their role in decarbonising industrial energy consumption. The analysis relies exclusively on secondary data sources, including regulatory commission orders, government policy documents, industry reports, corporate disclosures, academic literature, and think tank publications up to mid-2025. The study applies a structured comparative policy analysis framework across six key industrial states like Gujarat, Karnataka, Maharashtra, Tamil Nadu, Haryana, and Rajasthan selected for their diverse industrial bases, RE resource availability, policy regimes, and levels of corporate RE engagement.
The findings reveal that while there is a clear and growing momentum among Indian industries to adopt renewable energy driven by long-term cost savings and sustainability goals—the state-level policy landscape remains the primary determinant of actual adoption. Progressive states such as Gujarat and Karnataka have established predictable regulatory frameworks, reduced open access surcharges, and favourable energy banking provisions, thereby facilitating the entry of RE into industrial supply chains. In contrast, states like Maharashtra and Haryana impose high cross-subsidy surcharges (CSS) and additional surcharges (AS), restrict energy banking timelines, and display inconsistent implementation of Green Energy Open Access (GEOA) rules. These policy barriers create financial and operational uncertainty for industries, discouraging RE investment even where technical feasibility is high.
Furthermore, the study examines the range of procurement models adopted by industries, including captive and group captive plants, third-party open access (OA), green power exchanges, and emerging virtual power purchase agreements (VPPAs). Among these, the group captive model has gained the most traction, particularly in states with prohibitive OA surcharges, as it offers partial exemption from certain levies while meeting regulatory compliance. However, the study finds that newer models like VPPAs, which have shown promise in mature markets like the US and Europe, remain nascent in India due to a lack of regulatory clarity and standardisation.
The thesis also applies the Multi-Level Perspective (MLP) framework to contextualise the industrial energy transition as a systemic socio-technical shift. At the landscape level, global pressures such as climate commitments, investor expectations, and RE cost trends create an overarching push for transition. At the regime level, however, entrenched interests—especially state DISCOMs—often resist open access-based RE procurement due to perceived revenue loss, capacity payment obligations, and grid management concerns. As a result, industrial decarbonisation via corporate RE remains limited by structural inertia, despite technological and financial feasibility.
Additionally, sectoral variations in RE uptake are evident. While IT services, textiles, and FMCG sectors have shown substantial RE integration due to stable load profiles and high brand visibility, hard-to-abate sectors such as cement, steel, and chemicals have only partially decarbonised, primarily addressing electricity needs while thermal and process heat applications remain largely fossil-fuel-based. This represents a major limitation in the current scope of corporate RE procurement in contributing to full-spectrum industrial decarbonisation.
The study concludes that for corporate renewable procurement to become a scalable and equitable decarbonisation strategy, India must urgently pursue policy harmonisation, regulatory clarity, and infrastructure strengthening. Uniform implementation of Green Open Access Rules, rationalization of surcharges, standardised banking mechanisms, and development of VPPA-enabling regulations will be essential. Further, capacity-building programs and financial incentives must be introduced to support MSMEs, which face disproportionate challenges in accessing RE due to high upfront costs, limited credit access, and lack of technical know-how.
Ultimately, this research provides a nuanced understanding of the policy-implementation gap that governs corporate RE procurement in India and offers practical insights for policymakers, regulators, and industry stakeholders seeking to accelerate industrial decarbonisation. By creating a more stable, transparent, and investor-friendly RE procurement environment, India can align its industrial growth with its net-zero ambition and contribute meaningfully to the global climate agenda.
Keywords: Corporate Renewable Procurement, Open Access, Virtual PPA, Multi-Level Perspective, State Electricity Regulation.
