India expects annual power output to grow at the fastest in over a decade

India anticipates a strong 9.3% growth in power generation to 1,900 billion kilowatt hours (kWh) by March 2025, per internal federal power ministry projections. This acceleration, the fastest since at least 2011-12, is driven by scorching heatwaves and an economic rebound, propelling electricity production by an average of around 8% annually post the pandemic slump in 2020-21.

The upswing in power generation is expected to be chiefly fuelled by fossil fuel-fired plants, comprising over 76% of the total output for the second consecutive year. Coal-fired power output is projected to rise by 8.9%, surpassing growth in renewable energy production. In comparison, natural gas-fired electricity generation is forecasted to increase by 10.5%. However, India's renewable energy output, including solar, wind, hydro, and biomass, is anticipated to see a comparatively modest 8.2% growth in 2024-25, marking its slowest rise in four years. Despite endeavours to boost renewable capacity, India remains below its 2022 target of adding 175 GW to the grid, amplifying reliance on coal and complicating decarbonization efforts. Nevertheless, hydropower output is poised to rebound by 10.3% this year, following a steep decline in the previous fiscal. The forecasted above-average monsoon in 2024 is set to boost India's hydropower prospects, with the monsoon playing a pivotal role in the country's annual rainfall and reservoir replenishment, which is crucial for electricity generation.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.