India’s power demand is projected to grow by 6.0–6.5 per cent annually over the next five years, driven by accelerating electric vehicle (EV) adoption, rapid expansion of data centres, and the development of green hydrogen projects, according to ICRA.“These three segments are expected to contribute to 20–25 per cent of the incremental demand over the next five-year period from FY2026 to FY2030,” said Vikram V, Vice President & Co-Group Head – Corporate Ratings, ICRA, quoted by ANI. However, he also claimed that this rising demand for grid capacity could be partially offset by the increasing uptake of rooftop solar and off-grid solutions, aided by initiatives like the Pradhan Mantri Surya Ghar Yojana.The report highlights that the EV sector will see broad-based growth, led by three-wheelers, followed by two-wheelers, electric buses and passenger vehicles.For FY2026, ICRA expects a strong thermal plant load factor of 70 per cent, backed by a projected power demand growth of 5.0–5.5 per cent. Total power generation capacity is forecast to rise to 44 GW in FY2026, up from 34 GW in FY2024, with contributions from both renewable and thermal sources.“The thermal segment is expected to add 9–10 GW capacity in FY2026, while the remaining capacity addition will primarily come from renewable energy,” the agency said. While renewables will continue to dominate capacity growth, ICRA noted a significant uptick in thermal projects under construction, which currently exceed 40 GW.The agency also observed that the expected FY2026 demand growth of 5.0–5.5 per cent is slightly below its GDP growth forecast of 6.5 per cent for the same period, attributing the gap to the anticipated early onset and above-average monsoon, which tends to dampen cooling and agricultural power demand.
