India’s long-term energy demand is projected to rise by about 6 percent annually until 2030, according to a report by CareEdge Ratings. The increase is expected to be supported by sustained economic expansion and emerging demand drivers such as electric vehicles (EVs), data centres and the growing adoption of green hydrogen.

The report highlights that India’s power sector has been experiencing robust momentum in recent years, with electricity demand growing between 7.7 percent and 9.4 percent during FY22 to FY24. This strong performance was supported by a healthy rebound in GDP following the disruptions caused by the COVID-19 pandemic.

To meet the growing demand, the Government of India has targeted the addition of 100 gigawatts (GW) of new thermal capacity by FY32. Out of this, 33.2 GW is already under construction. CareEdge Ratings noted that further acceleration in capacity addition is expected with the commissioning of these projects and the placement of new orders over the next few years.

Sabyasachi Majumdar, Senior Director at CareEdge Ratings, observed that India’s power sector is at a critical juncture. He noted that renewable energy and storage solutions will drive future capacity growth, while the thermal segment will continue to provide essential stability in the short and medium term to meet rising base load requirements.

The report underlines that reforms to strengthen distribution company (discom) finances, alongside a more secure coal supply chain and rapidly declining storage costs, are setting the stage for sustainable and reliable growth in the sector. This combination is expected to enable India to maintain energy security while also pursuing its broader decarbonisation objectives.

The country’s power generation mix is undergoing a significant transformation, with renewable energy set to account for a larger share of future capacity additions. However, the report stresses that thermal power will remain a critical component of the system until renewable energy and storage solutions reach a scale sufficient to meet the country’s rising energy needs on their own.

India’s electricity demand is increasingly being shaped by emerging sectors. The rapid adoption of electric vehicles is expected to contribute significantly to future consumption, while the expansion of data centres across the country is driving a new category of large, steady demand for power. Meanwhile, the push for green hydrogen as a clean energy carrier is also anticipated to add to the load on the power system in the coming years.

Source:

https://www.thehawk.in/news/science/indias-long-term-energy-demand-is-expected-to-grow-at-6-pc-evs-data-centres-to-drive-growth