India's long-term energy demand is expected to grow at 6 pc; EVs, Data Centres to drive growth

New Delhi, Sep 2 (IANS) The long-term energy demand in India is projected to rise by around 6 per cent per annum till 2030, aided by sustained economic expansion and emerging demand drivers such as electric vehicles, data centres, and green hydrogen, a report said on Tuesday.

"The power sector has witnessed strong demand momentum, with growth between 7.7 per cent and 9.4 per cent during FY22–FY24, supported by a healthy rebound in GDP post-COVID," CareEdge Ratings said in a report.

The Government of India has targeted 100 GW of new thermal capacity by FY32, with 33.2 GW currently under construction.

According to the report, further capacity addition is expected to accelerate with the commissioning of under-construction projects and placement of fresh orders.

“India’s power sector is at an inflexion point—renewable energy and storage will drive future capacity growth, even as the thermal segment provides critical stability to meet rising demand," said Sabyasachi Majumdar, Senior Director, CareEdge Ratings.

With reforms strengthening discom finances, coal supply ensuring fuel security, and storage costs rapidly declining, the sector is positioned for sustainable, reliable, and green growth in the coming decade, Majumdar added.

The power sector is undergoing a significant transformation, with renewable energy poised to drive future capacity additions.

As per the rating agency, while thermal capacity additions will remain critical to support base load requirements until renewable energy with storage solutions scales up, the generation mix is set to evolve rapidly.

"The share of non-fossil sources in total energy generation is expected to rise to over 35 per cent by FY30, compared to 25 per cent in FY25, with new capacity additions led by solar, followed by wind," the report highlighted.

Also, a positive point to note is that domestic coal supply has grown at a 9 per cent CAGR over the last five years, reducing reliance on imports and mitigating fuel cost and forex risks.

Thermal power, however, continues to play a critical role in meeting India’s base-load requirements.

Plant Load Factors (PLFs) have improved from 56 per cent in FY20 to 70 per cent in FY25, backed by robust power demand and healthy domestic coal supply, the report stated.

Nearly 33 GW of thermal capacity is currently under construction, with private players expected to contribute about one-third of future additions.

The report noted that the Aggregate Technical and Commercial (AT&C) losses have declined to 15–16 per cent in FY22–24, compared to 22 per cent during FY19–21.

--IANS

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