Electricity demand in India set to grow at 4.6 pc CAGR during FY26-30: Report

NEW DELHI: The demand for electricity in the country is projected to register steady growth in the coming years, with YES Securities forecasting a compound annual growth rate (CAGR) of about 4.6 per cent during FY26-30.

This translates into an addition of nearly 424 billion units (BUs) of demand over the period. To meet this rising requirement, the country is expected to add more than 250 gigawatts (GW) of power capacity in the same timeframe, according to the report.

It stated, “As per our projections, we foresee power demand growth at a CAGR of approx. 4.6 per cent (adding 424BUs) for period FY26-30 and a capacity addition of over 250GW for the same period.”

According to the report, India’s power consumption has seen a significant and consistent increase in recent years. Electricity demand rose from 1,002 BUs in FY14 to 1,695 BUs in FY25. Over the last decade, covering FY15-FY25, the demand grew at a CAGR of nearly 4.9 per cent. The pace has been faster in the more recent five-year period, FY20-FY25, when electricity demand expanded at around 5.6 per cent CAGR.

The report attributed this acceleration to multiple factors, including the rapid economic recovery after the pandemic, higher manufacturing activity, and the continued electrification of both rural and urban areas. The report also highlighted that this marks a clear upward shift in India’s power consumption trajectory, reflecting the growing energy intensity of the economy.

Sectoral trends show that the industrial segment continues to consume the largest share of electricity, followed by the domestic, agriculture, and commercial sectors. Renewable energy additions have also played a critical role in supporting demand growth.

With renewables now making up a substantial portion of installed capacity, the energy transition is helping India balance rising demand while promoting sustainability. The report also highlighted that power outages in the country have drastically reduced in recent years, enabling more reliable supply and uninterrupted demand growth.

As per data, electricity consumption in India has nearly tripled since 2000, reflecting the combined impact of industrialization, urbanization, and wider electrification. Per capita consumption has climbed from around 400 kilowatt-hours (kWh) in 2000 to nearly 1,400 kWh in 2024. This steady rise points to the growing energy needs across all sectors of the economy as India continues to expand its industrial base. (ANI)