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India's Power Demand Surge Expected in 2026
5 Jan
Summary
- Power consumption growth slowed to 1% in CY25 due to heavy monsoon rains.
- Data centers, electric vehicles, and green hydrogen will drive future demand.
- Solar capacity additions hit a record 40 GW in CY25, but generation faced challenges.
India's electricity consumption experienced a notable slowdown in calendar year 2025, with growth decelerating to 1% compared to 5% in the previous year. Extended and heavy monsoon rainfall significantly reduced cooling demand across northern regions and impacted industrial and agricultural electricity usage. This period is viewed as a consolidation phase after several years of robust expansion.
Projections indicate a recovery in electricity demand for calendar year 2026. This upturn is expected to be driven by a normalization of weather conditions, leading to increased cooling requirements. Furthermore, emerging sectors such as data centers, electric vehicles, and green hydrogen are poised to become substantial new demand drivers, alongside expansion in formal office spaces.
On the supply front, CY25 saw record solar capacity additions of approximately 40 GW. However, operational challenges, including extended monsoons and transmission issues, impacted effective solar generation. While battery energy storage system capacity is growing, significant project implementation challenges persist for both BESS and pumped storage projects, though improvements are anticipated in CY26.
