New Delhi, Jul 30 (PTI) India’s electricity demand is expected to grow by a moderate 4 per cent in 2025, after cooler summer temperatures in the first half of the year reduced consumption and shifted peak load to September, the International Energy Agency (IEA) said.
In its mid-year update on electricity, IEA said while global power demand is rising much faster than the forecast for the 2025-2026 period than it did during the past decade, electricity demand in China and India is expected to rise at a more moderate pace in 2025 than the rapid growth seen in 2024.
“After 6 per cent growth in 2024, electricity demand in India is forecast to rise by 4 per cent this year,” it said.
IEA projected Chinese consumption to rise 5 per cent in 2025, down from 7 per cent in the previous year. However, China alone will account for 50 per cent of global electricity demand growth, as it did in 2024.
“In India, the impact of global economic uncertainties on industrial activity and cooler summer temperatures compared to 2024 led to electricity demand increasing by 1.4 per cent year-on-year in H1 2025. Demand is forecast to rise at a higher rate for the remainder of the year, reaching an annual growth rate of 4 per cent,” IEA said, projecting a robust 6.6 per cent growth in 2026, driven by stronger activity in industry and services, and increasing AC stock.
Citing estimates from the Ministry of Power for 2025, the Paris-based agency said peak load could reach 270 GW (8 per cent increase y-o-y) and shift to September instead of summer this year, although this should be fully met by rising generation capacity.
To manage peak load growth, the government is mulling a proposal on AC standards that would cap temperature settings between 20 and 28 degrees Celsius, potentially reducing peak load by up to 60 gigawatt (GW) in 2035.
On generation, IEA said the combined output from solar PV and wind was 20 per cent higher in H1 2025 y-o-y, which reached an almost 14 per cent share in the mix, up from 11 per cent in H1, 2024.
Solar PV generation grew 25 per cent and wind by slightly less than 30 per cent. A significant improvement in hydro conditions since mid-2024 resulted in hydropower generation increasing 16 per cent y-o-y between January and June. Additional capacity, including the 700 MW Unit-7 at the Rajasthan nuclear power station that connected with the Northern grid in March, contributed to the 14 per cent rise in nuclear generation for the same period.
A twin unit, RAPP-8, is expected to start operations in 2025-26 as part of plans to reach a nuclear capacity of 100 GW by 2047 announced under the Nuclear Energy Mission by the Government of India.
“Amid strong rise in output of low-emissions sources and more moderate demand growth, coal-fired generation decreased by 3 per cent in the first six months of the year — the first decline in the first half of the year since 2020. Gas-fired generation dropped by around 30 per cent in H1 2025, falling back to 2023 levels,” it said.
IEA expected coal-fired generation to rise again in H2 2025, registering around 0.5 per cent growth for the full year, followed by a 1.6 per cent increase in 2026. Gas-fired generation is forecast to decline by 3 per cent in 2025 before rebounding by 7 per cent in 2026.
Capacity additions for nuclear power are expected to drive generation from this source higher, up 15 per cent this year, and 19 per cent in 2026.
“Output from renewable energy sources is set to continue growing in H2 2025, with solar PV rising by 40 per cent y-o-y in 2025 and 28 per cent in 2026, while wind is projected to post more moderate growth of around 10 per cent both in 2025 and 2026. Hydropower output is forecast to continue rising as well in H2 2025, resulting in an increase of 7 per cent y-o-y this year before reaching a growth of 10 per cent in 2026,” it said.
India’s emissions intensity is expected to fall 3.8 per cent annually.
A drop in seaborne thermal coal prices to a four-year low eased input costs for coal-fired generation. On the supply-side, increased availability from thermal and renewable capacity additions strengthened market liquidity and exerted downward pressure on prices, IEA added. PTI ANZ TRB
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