India’s Power Sector to Grow Big by 2030, Says Jefferies Report
New Delhi [India], September 8: India’s power generation and transmission sectors are poised for substantial growth, according to a recent report by Jefferies. The report projects that these sectors will rise 2.2 times to USD 280 billion between FY24 and FY30 compared to FY17-23.
Jefferies noted that power intensity will be essential to sustain the economy’s rapid GDP growth. Power consumption is expected to grow more than 7% annually. By FY30, India’s total power generation capacity will need to increase from 442 GW in FY24 to 673 GW to avoid power shortages.
This expansion will drive further investment in thermal power, which is expected to play a vital role in maintaining grid stability. The country’s thermal power plants, currently operating at around 65-70% plant load factor (PLF), will be crucial in meeting this demand. The average annual PLF for thermal power plants is anticipated to surpass peak levels observed in FY08 by FY28, with thermal utilisation rates already hitting 74% in FY25 to date.
However, the report also highlighted that peak power deficits are becoming more frequent due to years of underinvestment. To prevent regular power shortages, the focus will be on accelerating capacity additions and boosting investment in power transmission and distribution (T&D) equipment. Capacity additions are projected to rise significantly, especially in thermal power where the annual addition rate is set to increase to 17 GW from the current 2-5 GW.
In line with traditional energy sources, renewable energy capacity will also grow rapidly. The annual capacity addition for renewables is expected to increase 3.5 times between FY24 and FY27 compared to FY10-20. India aims to achieve 450 GW of renewable energy by 2030.
The power transmission sector is also set for significant growth, with the bid pipeline increasing seven-fold over the past three years. In February 2021, the pipeline was valued at less than Rs 150 billion, but now Rs 1 trillion in projects are up for bidding. This rapid expansion will be driven by the government’s focus on expanding renewable energy capacity, alongside the growing needs for storage, green hydrogen, data centres, and electric vehicle infrastructure.
Doubts Revealed
Jefferies -: Jefferies is a company that provides financial services like investment banking and research. They study markets and make reports about different industries.
USD 280 billion -: USD 280 billion means 280 billion US dollars. It’s a way to measure a very large amount of money, like how much the power sector in India will be worth.
FY30 -: FY30 stands for Fiscal Year 2030. A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting.
GDP -: GDP stands for Gross Domestic Product. It is the total value of all goods and services produced in a country in a year. It shows how rich or poor a country is.
Thermal power -: Thermal power is electricity generated by burning fossil fuels like coal, oil, or natural gas. It is one of the main ways to produce electricity.
Renewable energy -: Renewable energy comes from sources that do not run out, like sunlight, wind, and water. It is better for the environment than burning fossil fuels.
Power transmission -: Power transmission is the process of moving electricity from power plants to homes and businesses through wires and cables.
Government initiatives -: Government initiatives are actions taken by the government to support or improve something, like building more power plants or encouraging the use of green energy.
Green energy -: Green energy is energy that comes from natural sources like the sun, wind, and water. It is called ‘green’ because it is good for the environment.
Infrastructure -: Infrastructure refers to the basic physical systems of a country, like roads, bridges, and power lines, that are needed for the economy to function.
