India’s power sector is entering a new era characterized by sustainability, growth, and a positive impact on the economy. A convergence of demand drivers, policy initiatives, and strategic investments has ignited this transformative change.
The focus on electrifying transportation, increasing ownership of household appliances, and nurturing a robust manufacturing ecosystem is guiding the sector towards a resilient and sustainable future. With a growing economy and increasing penetration, as well as per capita consumption, the role of the power sector is poised to ascend even further.
DEMAND SUPPLY STILL MEANS MORE ROOM FOR GROWTH
Strong demand from the consumption and industrial sectors, fuelled by government capex, has already started to reflect in overall demand growth. In recent months, India’s electricity production has been growing at 8% to 10%. However, this is still not enough; the peak power demand hit an all-time high of 240 GW in September ’23, driven by higher growth in demand. During the first nine months of the current fiscal year (2024), India’s power demand grew by 8%, slightly higher than the GDP growth of around 7%.
India’s power sector is bracing for a formidable challenge in the coming 18 months to 24 months, with peak power shortages projected to persist in the range of 4% to 10%. Factors such as rapid industrialization and population growth are identified as root causes, necessitating robust solutions in power generation, grid enhancements, and more extensive utilization of renewable energy sources.
BROAD-BASED DEMAND GROWTH
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