India’s power sector poised for robust growth with renewable energy push

Energy demand in India to jump 35%, power capacity triple by 2035 India’s power sector is on the brink of significant expansion as the country gears up for an unprecedented surge in energy demand. Over the next decade, India is expected to witness one of the fastest-growing energy markets globally, driven by rising demand from […] The post India’s power sector poised for robust growth with renewable energy push appeared first on PGurus.

Nov 9, 2024 - 15:47
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India’s power sector poised for robust growth with renewable energy push
The power sector growth is fueled by ambitious renewable energy targets and the increasing shift towards cleaner energy sources

Energy demand in India to jump 35%, power capacity triple by 2035

India’s power sector is on the brink of significant expansion as the country gears up for an unprecedented surge in energy demand. Over the next decade, India is expected to witness one of the fastest-growing energy markets globally, driven by rising demand from all sectors, including industry, transportation, and residential consumption.

The country’s power transmission sector, in particular, is set for substantial growth, fueled by ambitious renewable energy targets and the increasing shift towards cleaner energy sources.

According to the Central Electricity Authority (CEA), India will require an estimated $110 billion in investments between FY22 and FY32 to meet the rising energy demand, with a special emphasis on renewable energy infrastructure. The country’s renewable energy capacity is rapidly expanding, as solar and wind energy plays a pivotal role in meeting new power needs. Japanese brokerage Nomura projects that India’s electricity demand will grow at a compound annual growth rate (CAGR) of over 7% between FY2024 and FY2027. Notably, renewable energy is expected to account for a larger share of this growing demand, with solar and wind power meeting 75% of India’s incremental power needs, according to Nomura.

Renewables will continue to dominate India’s energy landscape, with the share of renewable energy expected to grow to 55% of total power capacity. In line with these expectations, India is focusing on achieving ambitious renewable energy milestones. The International Energy Agency (IEA) in its “World Energy Outlook” report highlights India’s rapid growth, with the country on track to become the third-largest economy in the world by 2028. Under its current policy framework, India’s energy demand is projected to rise by nearly 35% by 2035, with electricity generation capacity nearly tripling to 1,400 GW by that time.

To support this growth, India’s National Electricity Plan (Transmission), launched recently, targets the transmission of 500 GW of renewable energy by 2030, and over 600 GW by 2032. In parallel, the country’s power generation mix is expected to see a significant transformation, with renewable energy, including hydropower, forecast to comprise 35% of the total energy share by FY2030, up from 21% in FY2024, according to credit rating agency ICRA.

However, reaching these targets will require continued investment and a rapid increase in renewable energy capacity. To meet the renewable purchase obligation (RPO) target of 43.3% by FY2030, India will need to more than double its current renewable energy capacity of 200 GW. The Indian government has committed to ensuring that 50% of the country’s installed power capacity will come from non-fossil fuel sources by 2030, marking a critical step toward a cleaner, more sustainable energy future.

With these ambitious plans, India is positioning itself to lead in the global transition to renewable energy, while simultaneously addressing its growing energy needs. The coming years will be pivotal in achieving these goals, with significant opportunities for growth in both the power sector and the broader economy.

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The post India’s power sector poised for robust growth with renewable energy push appeared first on PGurus.

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