NEW DELHI: The Indian utilities sector experienced a tempered performance during the Monsoon quarter, as power generation recorded a marginal 1.1% year-on-year (YoY) increase to 468 billion units (BU) in Q2FY25. Factors such as reduced cooling demand due to favourable weather conditions led to a 5% YoY decline in peak power demand to 231 GW, while the plant load factor (PLF) of coal-based plants dropped by 250 basis points to 64.8%.
Despite subdued short-term demand, significant investments and capacity expansion in renewable energy (RE) underline the sector’s long-term growth trajectory. “The government’s ambitious target of 500GW RE capacity by FY32 has spurred major firms like JSW Energy, NTPC, and Tata Power to ramp up projects in solar, wind, and hybrid energy,” a sector expert highlighted.
Key players have outlined aggressive plans to drive the energy transition. NTPC, a leader in thermal power, is simultaneously investing in renewables intending to add 16 GW of RE capacity within three years. In parallel, it remains committed to its thermal projects, with 9.5GW of new capacity under construction. Tata Power has 6,447 MW of ongoing renewable projects, while JSW Energy has 3.5 GW of RE capacity in its pipeline.
Despite the rise of renewables, thermal power continues to play a vital role in ensuring a reliable energy supply. NTPC is slated to contribute significantly to the additional 80GW thermal capacity planned by the Ministry of Power, with much of it aimed at bridging gaps during renewable intermittencies.
Looking ahead, the sector expects a sustained 7% compound annual growth rate (CAGR) in power demand until FY32, driven by factors such as urbanization, increased adoption of electric vehicles, and the expansion of data centres. Investments in storage solutions and transmission infrastructure are expected to support the integration of renewable energy into the grid, ensuring round-the-clock power availability.