How can India meet its rising power demand?

As the fastest-growing major economy in a rapidly heating world, India’s electricity demand is growing fast.

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Since FY21, India’s electricity consumption has risen at approximately 9% per annum, compared to an average of 5% annually in the preceding decade. The Central Electricity Authority (CEA) had projected electricity demand to grow at a 6% CAGR between 2022 and 2030. However, recent trends suggest a strong likelihood of overshooting these estimates. Can India’s power sector keep up with this demand and transition to renewables at the same time?

What's driving India’s electricity demand?

Besides economic growth and urbanisation, climate change-induced heat stress, marked by increasingly hotter summers, is one of the key factors driving electricity demand. Currently, industries, households, and agriculture comprise 33%, 28%, and 19% of total electricity use in India, respectively. Yet, household electricity demand has grown the fastest over the past decade. The summer of 2024 witnessed a 40-50% year-on-year growth in room air conditioner sales, driven by rising incomes and record-breaking temperatures. All-India peak demand crossed 250 GW on May 30, 2024, which was 6.3% higher than projections. In 2025, after recording the warmest-ever February in 125 years, India must now brace for extended heatwaves and a peak electricity demand growth of 9-10%.

How has India met rising demand so far?