Understanding Power Demand and Electricity Supply in India

Power Demand and Electricity Supply Overview

Power demand in India has seen rapid growth, fueled by economic expansion and rising temperatures. The all-India peak power demand is projected to hit 277 GW in FY26, showcasing significant challenges in electricity supply.

Electricity Consumption Trends

• In FY25, India recorded an electricity consumption of 1,694 billion units, a significant increase over previous years.
• Consecutive years of economic growth have doubled per capita electricity consumption from 631 units in 2005 to 1255 units in 2022.

Factors Increasing Power Demand

• The high demand for electricity is largely due to rising temperatures, particularly during summer months.
• Air conditioners alone accounted for approximately 60 GW of peak demand in 2024, expected to increase significantly by 2030.

Preparing for Future Electricity Needs

To address increasing power demand, India must boost its electricity supply with a focus on renewable energy sources. Reports predict that by 2030, India will need 777 GW of installed power generation capacity, of which 64% should be non-fossil fuel-based. This shift is crucial to meet rising consumption and climate requirements.

Market Dynamics

• Electricity prices are subject to rise during peak demand periods, particularly in summer.
• Power distribution companies are encouraged to optimize generation capacity to meet demand while minimizing impact on consumers.