India's Power Demand To Rise 4% In 2025, Renewable Energy Output Surges: IEA

India.com

a day ago

New Delhi: India's electricity demand is expected to grow by 4 per cent in 2025, as cooler summer temperatures in the first half of the year (H1 2025) reduced consumption and pushed the annual peak load to September, the International Energy Agency (IEA) said in its mid-year electricity market update.
The Paris-based agency said industrial activity was also impacted by global economic uncertainties in the first half of the year, leading to just 1.4 per cent YoY growth in demand between January and June 2025. However, demand is expected to pick up in the second half, reaching an overall growth rate of 4 per cent for the year.
For 2026, the IEA forecasts a stronger 6.6 per cent growth, driven by increased industrial and service sector activity and rising use of air conditioners. According to Ministry of Power estimates cited by the IEA, India's peak electricity load this year could touch 270 GW -- up 8 per cent from last year -- and is likely to occur in September instead of the summer months.
The peak will be met by expanding generation capacity, the report said. The government is also considering setting air conditioner temperature standards between 20°C and 28°C, which could potentially cut peak demand by as much as 60 GW by 2035.
On the generation front, renewable energy sources posted strong growth in the first half of 2025. Combined output from solar and wind plants rose 20 per cent YoY, raising their share in the electricity mix to nearly 14 per cent from 11 per cent in the same period previous year.
Solar PV generation was up 25 per cent and wind generation by nearly 30 per cent. Hydropower output rose 16 per cent year-on-year due to improved water availability, while nuclear generation increased 14 per cent, helped by the commissioning of the 700 MW Unit-7 at Rajasthan's nuclear power station in March.
Its twin, Unit-8, is expected to start operations in 2025-26, part of India's plan to reach 100 GW of nuclear capacity by 2047 under the Nuclear Energy Mission. The surge in low-emission power generation, along with slower demand growth, led to a 3 per cent drop in coal-fired electricity generation in the first half of 2025 -- the first such decline in the first half of a year since 2020.
Gas-fired generation fell sharply by around 30 per cent, returning to 2023 levels. For the full year, coal-based power output is expected to edge up 0.5 per cent before growing 1.6 per cent in 2026, while gas-based generation is likely to decline 3 per cent in 2025 and then rebound 7 per cent in 2026.
Nuclear output is expected to rise 15 per cent this year and 19 per cent next year, while solar generation could grow 40 per cent in 2025 and 28 per cent in 2026. Wind power is projected to see growth of about 10 per cent in both years, and hydropower is set to expand 7 per cent in 2025 and 10 per cent in 2026. The IEA also projected that India's emissions intensity will fall by 3.8 per cent annually.