India’s power generation grows 5.4% in FY25 on higher demand

New Delhi: India’s power generation went up 5.41% in April-December of the current financial year to 1,378.42 billion units, as compared with 1,307.64 billion units in the year-ago period, according to data from the Central Electricity Authority (CEA).

This assumes importance given that energy consumption, especially that of electricity and refinery products, is typically linked to overall demand in the economy.

The generation growth, recorded across thermal, renewables and nuclear, also comes on the back of higher demand both during the summer and winter. With cooling requirement leading to higher demand in summers, India witnessed a record 250GW of peak demand in May 2024. 

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The winter demand for electricity has also been higher this year leading to a 5.76% growth in December to 150.53 billion units. Amid a cold wave across north India, Delhi on 31 December registered a peak demand of 5,213MW, the highest ever for the month. Last December, demand crossed the 5,000MW mark for the first time. On Thursday, the peak demand stood at 4,599MW.

Further, in December, the nationwide peak demand was largely above 200GW and touched a high of 224GW due to increased demand for heating. The peak demand is still high across the country. The peak power demand on Wednesday stood at 237.30GW.

Dealing with high demand

Since the crisis-like situations in FY22 and FY23, the government has been trying to take measures ahead of the peak demand. On 27 December, the Centre extended the mandate for imported coal based power plants to operate at full capacity till 28 February, 2025 anticipating persistent higher demand during the period.

Along with increase in power generation, addition of installed power capacity also gained momentum during FY25. The CEA data showed that a total of 19.97GW of new power generation capacity was added during the fiscal, taking the overall installed capacity to 462GW. The capacity addition this financial year witnessed a 60.28% growth from 12.46GW in the last fiscal.

Renewable energy projects comprised the majority of the capacity addition. A total of 18.83GW of green capacity was added during the period, more than double the capacity added in the corresponding period of the last fiscal, 8.72GW.

The increase in capacity addition comes on the back of developers going for faster commissioning of projects ahead of the expiry of the inter-state transmission system (ISTS) charges exemption for renewable energy projects. ISTS charges are meant to be paid by power generation companies to transmission companies for supplying power to states other than where the generation company is generated.

Currently, ISTS charges are waived for 25 years for green projects—solar, wind, hybrid, battery energy, and pump storage projects—that are commissioned before 30 June 2025.