India’s Power Sector to See Rs 40 Trillion Investment Over Next Decade, Says Motilal Oswal
New Delhi [India], September 24: India’s power sector is poised for significant growth, with investment opportunities estimated at over Rs 40 trillion in the next decade, according to a report by brokerage firm Motilal Oswal.
Of the Rs 40 trillion investment potential, Rs 34 trillion is expected to be in capital expenditure, with the remaining in optionality. The investment will be distributed across generation, transmission, and smart metering, accounting for 86%, 10%, and 4% respectively.
The report highlights several factors driving this massive investment, including accelerating power demand, upgrading or replacing old power infrastructure, and transitioning to cleaner energy sources. India’s growing GDP, technological advancements, and increased electrification are also significant contributors.
Motilal Oswal predicts that power consumption in India could grow at a compound annual growth rate (CAGR) of over 7% in the next decade, driven by new demand drivers such as electric vehicles (EVs) and data centers. By 2035, these sectors are expected to account for one-third of the power demand growth in India.
Currently, EVs and data centers have a negligible share of power demand, but this is set to change significantly. The report draws parallels between India’s current energy consumption trends and those of China in the early 2000s, suggesting that India is at an inflection point in its power consumption growth.
At the COP26 summit in 2021, India made ambitious commitments, including reaching 500 GW of non-fossil electricity capacity, generating half of its energy from renewables, and reducing emissions by 1 billion tonnes by 2030. India also aims to reduce the emissions intensity of its GDP by 45% and achieve net-zero emissions by 2070.
Doubts Revealed
Power Sector -: The power sector is the part of the economy that deals with producing and supplying electricity to homes, businesses, and factories.
Rs 40 Trillion -: Rs 40 trillion means 40 lakh crore rupees. It’s a huge amount of money that will be invested in India’s power sector.
Motilal Oswal -: Motilal Oswal is a big company in India that provides financial services like investment advice and stock trading.
Capital Expenditure -: Capital expenditure is money spent by a company or government to buy, maintain, or improve its fixed assets, like buildings, vehicles, equipment, or land.
Electric Vehicles -: Electric vehicles are cars or bikes that run on electricity instead of petrol or diesel. They are better for the environment because they don’t produce pollution.
Data Centers -: Data centers are large groups of computer servers used by companies to store, manage, and process data. They need a lot of electricity to run.
GDP Growth -: GDP growth means the increase in the value of all goods and services produced in a country. It shows how well the economy is doing.
