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

India expects power generation to grow 9.3% to 1,900 billion kilowatt hours (kWh) during the fiscal year through March 2025, internal projections by the federal power ministry reviewed by Reuters show, the fastest pace of growth since at least 2011/12.

Searing heatwaves and an uptick in economic activity have resulted in India's electricity generation growing at an average of about 8% annually following the pandemic year of 2020/21, outpacing power demand growth in every major global economy.

India's weather office has forecast more heat-wave days than normal between April and June this year, potentially boosting power use and generation further.

This is expected to boost demand for fossil fuel-fired power, which is projected to grow about 9% and account for over 76% of total output for the second straight year, according to a power ministry document containing the internal projections.

Coal-fired power output is expected to rise 8.9% over the year, outpacing the growth projected for renewable energy output, according to the document. Natural gas-fired electricity generation is seen rising 10.5%, it showed.
 

India's renewable energy output - including solar, wind, small hydro plants and power from biomass - is expected to grow 8.2% in 2024/25 to 244 billion kWh, its slowest rise in four years. China's wind and solar output, in comparison, grew about 21% in calendar year 2023.

Despite increasing its renewable energy capacity to 143.65 GW, India is still short of a 2022 target of adding 175 GW of renewable energy to its grid. This failure to meet renewable targets has boosted India's dependence on coal and complicated efforts to wean its economy away from carbon.

Some clean energy sources of power generation, however, are expected to pick up this year.

Hydropower output, which recorded its steepest fall in at least 38 years in 2023/24, is expected to grow 10.3% this year, the ministry's projections showed.

India's weather office expects the country to receive above average monsoon rains in 2024. The annual monsoon delivers nearly 70% of India's annual rainfall, and plays a crucial role in recharging reservoirs used to generate electricity.

Nuclear output, which has remained flat for years, is expected to grow by nearly 16% over 2024/24, as existing nuclear plants boosted capacity by bringing new units online, the projections showed.