India’s power sector set for robust growth amid renewable energy push

New Delhi (The Uttam Hindu): As India is poised to see a surge in energy demand than any other country over the next decade owing to its sheer size and scale of rising demand from all sectors, the country’s power transmission sector is set for significant growth due to ambitious renewable energy targets. 

The Central Electricity Authority expects $110 billion in investments over FY22-32E, as electricity demand surges amid ambitious renewable energy capacity addition targets.

According to Japanese brokerage Nomura, India's power demand is likely to grow at a CAGR of more than 7 per cent over the period financial year 2024 and 2027.

The renewable energy's share in India's power mix continues to grow with solar and wind power meeting 75% of India's incremental power demand, according to the brokerage.

The renewable energy's share in India's power mix continues to grow with solar and wind power meeting 75 per cent of India's incremental power demand.

“The share of renewable energy will grow from here on. It will account for 55 per cent of the total power capacity,” said a Nomura note.

According to the latest International Energy Agency (IEA) ‘World Energy Outlook’ report, India, which was the fastest-growing major economy in 2023 with output increasing by 7.8 per cent, was on track to become the third-largest economy in the world by 2028.

In the Stated Policies Scenario (STEPS) based on current policy plans, by 2035, the total energy demand in India was set to increase by nearly 35 per cent by 2035, and electricity generation capacity nearly tripling to 1400 GW.

India's National Electricity Plan (Transmission) launched last month aims to transmit 500 GW of Renewable Energy installed capacity by the year 2030 and over 600 GW of Renewable Energy installed capacity by the year 2032.

As per rating agency ICRA, the share of renewable energy, including hydro, in the country’s power generation is projected to rise to 35 per cent by FY30, up from 21 per cent in FY24.

Achieving the renewable purchase obligation (RPO) target of 43.3 per cent by FY30 will require more than doubling the current renewable energy capacity of 200 GW to meet future demand.

The government has committed to achieving 50 per cent of its installed power capacity from non-fossil fuel sources by 2030.