New Delhi [India], May 31
: India's power sector is set for strong growth in fiscal 2025, with healthy demand expected to grow by about 6.0 percent, albeit softer than the previous fiscal year. Healthy demand growth in the first two months of FY2025 stood at more than 1%. Percentage supported by favorable base. The report is validated by the record maximum power demand of 250 GW on May 30, as announced by the Power Ministry. FY2014 saw significant growth in electricity demand with a year-on-year growth of 7.6 per cent, the report said.Base, driven by resilient economic activity and weather-related load, the nationwide average thermal plant load factor (PLF) increased to 69.1 per cent in FY2024 from 64.2 per cent in FY2022, of the total power generation capacity in FY24. It improved to 25.4 GW. Driven by growth in the renewable energy and thermal segments as well as the commissioning of 1.4 GW nuclear power capacity, from 16.9 GW in FY2013, according to the government, the thermal generation segment played an important role in meeting the growing demand, non- All-time high of 176G during solar hours. The growth trajectory extends to the renewable energy (RE) sector, which I expect will see growth in installed capacity, which will contribute to the overall power generation scenario, leading to gross growth in installed power capacity. Addition is expected to exceed 30 GW in FY2025, with the RE segment leading. After a commendable performance of 25 GW in FY24, the tariff hike approved for FY2025 was relatively modest, with an average increase of 2.5 per cent. With, which was less. 3.9 percent approval for FY24. This slow growth comes at a time when the subsidy dependence of distribution companies (discoms) on state governments is expected to increase significantly.It is estimated that this subsidy dependence will increase from Rs 1.7 trillion in FY 2023 to Rs 1.9 trillion in FY 2025. This increase is attributed to rising cost of supplies and the introduction of additional subsidy schemes in some states. Despite the positive outlook, challenges remain, particularly in the distribution segment. Progress in issuing tariff orders for state distribution utilities (DISCOMs) remains slow, with only 11 out of 28 states issuing orders by May 2024. This delay has been partly attributed to the ongoing elections.Moreover, the average tariff increase approved for FY2025 has been relatively low, at 2.5 per cent less than the previous fiscal year. A change has also been seen in the dynamics of coal imports, with imports by power utilities increasing by 18.1 per cent in FY24. This is a reversal. This trend was influenced by government directives to blend imported coal for domestic coal-fired projects, reflecting evolving political interventions aimed at optimizing resource use. The sustainability of these achievements depends on addressing structural inefficiencies, especially in high-deficiency states like Bihar, Jharkhand Central.Pradesh, Odisha and Uttar Pradesh, where aggregate technical and commercial loss (AT&C) loss levels exceed 20 per cent, overall, the ability of government agencies, power generation companies to address power sector challenges and capitalize on growth opportunities. Underlines the coordinated efforts of stakeholders including And his strong commitment to increasing grid operators' generation capacity and implementing policy reforms remains critical in meeting the country's energy demands. Highlighting this sector, the Power Ministry reiterated the importance of renewable energy sources, especially solar and wind, in enhancing power supply during peak hours. Transition towards a sustainable and diverse energy ecosystem.
: India's power sector is set for strong growth in fiscal 2025, with healthy demand expected to grow by about 6.0 percent, albeit softer than the previous fiscal year. Healthy demand growth in the first two months of FY2025 stood at more than 1%. Percentage supported by favorable base. The report is validated by the record maximum power demand of 250 GW on May 30, as announced by the Power Ministry. FY2014 saw significant growth in electricity demand with a year-on-year growth of 7.6 per cent, the report said.Base, driven by resilient economic activity and weather-related load, the nationwide average thermal plant load factor (PLF) increased to 69.1 per cent in FY2024 from 64.2 per cent in FY2022, of the total power generation capacity in FY24. It improved to 25.4 GW. Driven by growth in the renewable energy and thermal segments as well as the commissioning of 1.4 GW nuclear power capacity, from 16.9 GW in FY2013, according to the government, the thermal generation segment played an important role in meeting the growing demand, non- All-time high of 176G during solar hours. The growth trajectory extends to the renewable energy (RE) sector, which I expect will see growth in installed capacity, which will contribute to the overall power generation scenario, leading to gross growth in installed power capacity. Addition is expected to exceed 30 GW in FY2025, with the RE segment leading. After a commendable performance of 25 GW in FY24, the tariff hike approved for FY2025 was relatively modest, with an average increase of 2.5 per cent. With, which was less. 3.9 percent approval for FY24. This slow growth comes at a time when the subsidy dependence of distribution companies (discoms) on state governments is expected to increase significantly.It is estimated that this subsidy dependence will increase from Rs 1.7 trillion in FY 2023 to Rs 1.9 trillion in FY 2025. This increase is attributed to rising cost of supplies and the introduction of additional subsidy schemes in some states. Despite the positive outlook, challenges remain, particularly in the distribution segment. Progress in issuing tariff orders for state distribution utilities (DISCOMs) remains slow, with only 11 out of 28 states issuing orders by May 2024. This delay has been partly attributed to the ongoing elections.Moreover, the average tariff increase approved for FY2025 has been relatively low, at 2.5 per cent less than the previous fiscal year. A change has also been seen in the dynamics of coal imports, with imports by power utilities increasing by 18.1 per cent in FY24. This is a reversal. This trend was influenced by government directives to blend imported coal for domestic coal-fired projects, reflecting evolving political interventions aimed at optimizing resource use. The sustainability of these achievements depends on addressing structural inefficiencies, especially in high-deficiency states like Bihar, Jharkhand Central.Pradesh, Odisha and Uttar Pradesh, where aggregate technical and commercial loss (AT&C) loss levels exceed 20 per cent, overall, the ability of government agencies, power generation companies to address power sector challenges and capitalize on growth opportunities. Underlines the coordinated efforts of stakeholders including And his strong commitment to increasing grid operators' generation capacity and implementing policy reforms remains critical in meeting the country's energy demands. Highlighting this sector, the Power Ministry reiterated the importance of renewable energy sources, especially solar and wind, in enhancing power supply during peak hours. Transition towards a sustainable and diverse energy ecosystem.
