Rathin Vyas is the CEO and Co‑founder of Enerco Energy Solutions LLP, a Mumbai‑based consulting firm focused on industrial decarbonisation, renewable energy and energy efficiency. With over 17+ years of experience, he has led more than 250 industrial energy assignments and 100+ renewable energy projects, helping large manufacturers in India and overseas reduce energy use and integrate solar and hybrid renewable systems. A Harvard‑ and Cambridge‑certified sustainability specialist with a background in electronics and telecom engineering, he works at the intersection of energy strategy, digital transformation and Industry 4.0, and is a recognised voice on CBAM readiness and net‑zero roadmaps for energy‑intensive sectors like aluminium, steel and cement.

AL Circle: For aluminium and metals producers, power is often the single largest cost input. From your vantage point, how structurally exposed is the sector to energy price volatility today?

Rathin Vyas: A very large share of the raw material cost is energy, and in smelting, it is almost entirely electricity. In many primary aluminium operations, 60–70 per cent of the cash cost is effectively the power bill. So volatility in power prices directly translates into volatility in margins.

If you look at what happened in Europe in 2024, several smelters saw their margins completely wiped out because power prices spiked faster than aluminium prices could adjust. They were technically producing, but not profitably.

The second, more structural issue is the physical lock‑in. A smelter is not like a cement plant that you can ramp down at will. If there is no power for roughly 75 minutes, the molten aluminium in the pots starts to solidify. We saw that at the Portland Aluminium smelter in Australia in 2016. Restarting after that kind of incident can take months and cost hundreds of crores.

So producers are not just exposed to the level of electricity prices, but also forced to keep drawing power through peaks to avoid a catastrophic freeze. That makes the sector structurally very sensitive to both short‑term spikes and long‑term shifts in energy prices.

AL Circle: With aluminium being a baseload, power‑intensive industry, how realistic is large‑scale renewable integration without compromising operational stability?

Rathin Vyas: It’s challenging, because aluminium needs absolutely firm 24×7 power, and wind and solar by nature are intermittent. A straightforward shift to only solar or only wind is not realistic for a smelter.

The first step is obviously hybrids—wind plus solar—because their generation profiles are complementary. But even with a good hybrid, you still don’t control how a particular day behaves. You can forecast, but you cannot guarantee that “X megawatts” of green power will show up exactly when the smelter needs it.

That’s where battery storage comes in. A wind–solar–BESS combination can give you much better reliability, but the quantum of storage needed to truly cover a 24×7 baseload smelter is huge and currently uneconomical. Where batteries make more sense today is in time‑of‑day applications.

For example, evening tariffs between 6 and 8 pm are high in states like Maharashtra, Tamil Nadu or Rajasthan. You can charge batteries in the daytime with cheaper solar and discharge them during those peak hours – classic peak shaving for 2–4 hours. As storage costs fall further, this becomes increasingly attractive.

But for true baseload in India today, aluminium remains largely coal‑based. A realistic path is a portfolio: coal for firm baseload, plus a growing share of solar, wind and BESS to shave peaks, reduce overall emissions and gradually increase the renewable fraction.

AL Circle: In aluminium smelting and downstream metal processing, where do you see the largest untapped energy‑efficiency gains, and why do you think they are still being missed?

Rathin Vyas: From our work with most of the big aluminium names, the single biggest untapped lever is cell optimisation. That’s where you can unlock significant energy savings and meaningful reductions in specific emissions per tonne.

With CBAM now in force, cell‑level efficiency directly links to competitiveness. But most Indian smelters were commissioned decades ago—1960s, 70s vintages—and each has different technology. Vedanta’s lines are not identical to Nalco’s or Balco’s. That lack of standardisation makes it harder to roll out one common optimisation solution at scale.

So while the technical potential is large, the reality is: you need plant‑specific engineering, and that takes time, money and confidence in the technology. We do see traction now, but it’s still not mainstream.

The second big area is electrolysis waste‑heat recovery. There is a lot of low‑grade heat that can be captured and either reused or used to reduce overall energy draw. These kinds of retrofits and smarter control systems typically have paybacks in the 3–5 year range, which is quite attractive for heavy industry.

Many of the other, more conventional efficiency measures have already been tackled under India’s PAT cycles, and now we are moving into CCTS from April 2026. NITI Aayog’s own roadmap recognises energy efficiency as a core pillar of aluminium decarbonisation. But efficiency rarely makes headlines. A 500 MW renewable announcement is a front‑page story; a 5 per cent reduction in specific kWh per tonne shows up quietly on the balance sheet. And because efficiency retrofits touch core operations, management is understandably more cautious than with an offsite solar PPA.

AL Circle: In an industrial decarbonisation roadmap, how do you balance energy‑efficiency interventions against renewable energy additions? Which delivers faster and more durable gains?

Rathin Vyas: I always use the bucket analogy. If you’re filling a bucket that has leaks, it doesn’t matter whether the water is coming from the purest Himalayan spring or from a regular tap—you’re still wasting water. In our context, energy efficiency is about fixing the leaks before you worry about the source.

So the first step has to be efficiency, because it’s usually the quickest and the most cost‑effective. In our experience with large metal companies, well‑designed efficiency projects typically pay back in 18–24 months, and in some complex cases maybe 24–36 months. Renewables are also absolutely necessary, but the payback tends to be longer and they mostly displace a portion of the fossil power, they don’t eliminate it.

The big plus for renewables is that they sit outside core operations. You are not opening up your potline; you are changing the source of electrons through a rooftop plant or an offsite PPA. So operational risk feels lower.

However, we should be realistic: you cannot move an aluminium smelter to 100 per cent variable renewables with today’s technology. You will always need some firm power—today, that’s largely coal; tomorrow, it can be nuclear or gas‑plus‑CCUS—backing the baseload.

That’s why I’m very positive on nuclear, especially small modular reactors. The upcoming SMR policy can allow nuclear to cover, say, 60–70 per cent of the baseload, with the remaining 30–35 per cent coming from solar, wind and batteries. If you combine that kind of mix with serious efficiency and smart load modulation at the smelter, deep decarbonisation becomes technically and economically achievable.

AL Circle: Battery storage and hybrid systems are increasingly discussed for metals plants. At current cost curves, where does storage genuinely make economic sense?

Rathin Vyas: Batteries are at the stage where solar was around 2009–10: still relatively expensive, but on a very clear cost‑down curve and already compelling in some use cases.

In the last decade, battery prices have fallen by almost 90 per cent globally, and in India we’ve seen tariffs for solar‑plus‑4‑hour storage drop to roughly ₹2.7 per unit, with over 50 bidders entering these tenders. This year we expect that to soften further towards ₹2.5–2.4 per unit. That’s a dramatic shift.

On the technology side, we’re also moving beyond only lithium‑ion into chemistries like sodium‑ion, which may be bulkier but are well‑suited to large industrial campuses where space is not the main constraint.

Where storage really makes sense today for metals is for peak shaving and firming, not for full baseload replacement. Using 2–4 hours of BESS to clip evening peaks, back up solar and arbitrage time‑of‑day tariffs is already economically attractive in many states. Using batteries to carry an aluminium smelter overnight for 8–10 hours straight is still very capital intensive.

So in practical terms, I see batteries and hybrids being used as a surgical tool—firming, peak management, and improving the effective share of renewables—rather than as a standalone answer to baseload for aluminium.

AL Circle: Are OPEX and RESCO models meaningfully changing capex decision‑making for aluminium producers, or do balance‑sheet considerations still dominate?

Rathin Vyas: The CAPEX versus OPEX debate has been running for more than a decade, and there is still no one‑size‑fits‑all answer. OPEX, including RESCO, is conceptually very simple: you sign a PPA and start receiving power, with zero or very low upfront capex.

CAPEX is heavier upfront, but comes with clear advantages. For one, you typically pay lower per‑unit charges over the life of the asset and can avoid some pass‑through transmission and distribution costs. And from a finance perspective, accelerated depreciation—40 per cent in the first year for renewables—gives a meaningful tax shield, which many CFOs value highly.

So broadly, if the primary objective is tax optimisation and long‑term value creation, CAPEX tends to look better. If the immediate objective is conserving cash and still reducing the power bill, OPEX is attractive. Group‑captive sits in between: you put in maybe 7–8 per cent of the project capex to qualify as a captive consumer, and a developer funds the rest.

We did one of the early large rooftop OPEX projects back in 2016 for an FMCG major in Karnataka, when 1 MW of rooftop was a big number. At that time, many people thought OPEX would fully take over. What we have actually seen is more nuance: industries like the comfort of owning core assets and worry about being locked into a developer for 15–20 years on a pure OPEX basis.

Most CFOs I speak with today are exploring hybrid strategies: do some CAPEX in a modular way, test the waters with group‑captive or OPEX on part of the load, and then scale what works. The “battle” is still on, but for strategic, large‑volume supplies, CAPEX and group‑captive remain very much in play.

AL Circle: With CBAM and similar mechanisms tightening globally, are Indian aluminium and metals producers moving fast enough on measurable decarbonisation?

Rathin Vyas: In simple terms, no. Progress is happening, but if you look at where we need to be for CBAM, we are still behind the curve.

India’s aluminium sector sits at an average emission intensity of about 20–21 tonnes of CO₂ per tonne of metal, versus a global average closer to 15. That’s a big gap in a world where carbon is now a priced commodity. Some international producers have already brought a large share of their power from renewables and hydro, and optimised their cell operations and digital controls, so their intensity is materially lower.​

Indian producers have started moving—there is work happening on cell optimisation, digitalisation, and on adding renewables and even pumped hydro into the mix—but it’s from a high baseline. The “big four” have collectively talked about building up to 20 GW of renewables by 2030, backed by about 5 billion dollars of investment. That’s a strong signal of intent.

The challenge is two‑fold: first, that 20 GW is not just for running the pots, it also depends on significant upgrades to grid infrastructure and evacuation capacity. Second, CBAM is on a very tight timeline; the mechanism is already live, and effective carbon costs in Europe are not trivial.

If Indian metal producers want to be CBAM‑ready, they will have to move faster on three fronts simultaneously: deep efficiency inside the plants, serious and verifiable low‑carbon power, and smarter, collective infrastructure planning. My personal view is that a coordinated, bulk approach by the big players on renewables and transmission—rather than everyone going alone—would help a lot. Otherwise, we risk having announced capacity on paper that cannot be fully utilised in time for CBAM.