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New Delhi: States should support the decarbonisation of aluminium industries by waiving or reducing open access charges for renewable power, a study has said.
Open access charges are levied by power distribution companies (discoms) on those consumers which buy electricity from any other source.
State governments should also prioritise giving right of way to the industry for setting up their own evacuation infrastructure for transmission of renewable power, the study said.
Pitching for incentivising renewable energy as it plays a crucial role in decarbonisation, the study said that as per estimates aluminium plants need 3.94 GW of renewable energy round-the-clock to meet their power demand even after the adoption of all energy-efficient technologies.
Round-the-clock renewable energy projects comprise both wind and solar power capacities. A major share of aluminium smelting plants is in states that do not have optimal wind power potential, the study by public policy research think tank Council on Energy, Environment, and Water (CEEW) said.
It further said decarbonising aluminium production, unlike cement and steel, cannot be achieved with a reduction in the price of aluminium.
Energy efficiency, which is easily achievable, would result in a price increase of 1.5 per cent and reduce emissions.
The switching over from captive power plant (CPP) to renewable power (RE) would steeply reduce the emission intensity of aluminium and will also increase the cost of aluminium.
In order to manufacture net-zero aluminium while still maintaining economic viability, certain policy interventions are essential, it said.
According to the Indian Federation of Green Energy, all such initiatives that help in the reduction of carbon footprint must be supported by the government .
In case investment for switching over to RE from conventional energy burdens the private sector and dents its market competitiveness, the government should, in consultation with industries, find out a mechanism of viability gap funding to achieve the objective of reducing carbon footprint without burdening the industry, it said.
At the same time, the industry should be encouraged to use biomass in boilers to reduce the use of fossil fuel, it added.