India’s power sector is set to witness unprecedented growth, with the country expecting a remarkable surge in power generation for the fiscal year through March 2025. According to internal projections by the federal power ministry reviewed by Reuters, India anticipates a 9.3% increase in power output to reach 1,900 billion kilowatt hours (kWh), marking the fastest pace of growth in over a decade.
The surge in electricity generation comes on the heels of searing heatwaves and a resurgence in economic activity, which have propelled India’s electricity production to an average annual growth rate of about 8%. This growth outpaces that of every major global economy, indicating India’s robust energy demand.
India’s weather office has predicted an increase in heat-wave days between April and June this year, which is likely to further boost both power usage and generation. As a result, demand for fossil fuel-fired power is expected to rise by about 9%, accounting for over 76% of total output for the second consecutive year.
Coal-fired power output is projected to increase by 8.9% over the year, surpassing the growth expected in renewable energy output. Additionally, natural gas-fired electricity generation is forecasted to rise by 10.5%, reflecting the country’s diverse energy mix.
Despite these growth projections, India’s renewable energy output, including solar, wind, small hydro plants, and biomass, is expected to see a relatively modest increase of 8.2% in 2024/25, marking its slowest rise in four years. In comparison, China’s wind and solar output grew by about 21% in the previous calendar year.
India’s renewable energy ambitions have faced challenges, as the country is still short of its 2022 target of adding 175 gigawatts (GW) of renewable energy to its grid. This shortfall has heightened India’s dependence on coal and complicated efforts to transition to a low-carbon economy.
However, there are signs of progress in certain clean energy sectors. Hydropower output, which experienced its sharpest decline in at least 38 years in the previous fiscal year, is expected to rebound with a growth rate of 10.3% in 2024/25, according to the ministry’s projections.
Furthermore, India’s weather office predicts above-average monsoon rains in 2024, which play a crucial role in recharging reservoirs used for electricity generation. The annual monsoon delivers nearly 70% of India’s rainfall, impacting the country’s hydroelectric power production significantly.
In addition to hydropower, nuclear energy is expected to see a significant uptick, with output growing by nearly 16% over the fiscal year 2024/25. Existing nuclear plants are set to boost capacity by bringing new units online, contributing to the overall expansion of India’s power generation capacity.
India’s ambitious renewable energy targets and efforts to diversify its energy mix underscore its commitment to sustainable development. However, challenges remain in meeting these targets and reducing reliance on fossil fuels. The surge in power generation reflects both the opportunities and complexities inherent in India’s energy transition journey.
