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India's Power Mix Shifts: Renewables Surge, Thermal Dips
19 Jan
Summary
- Thermal power's share to drop below 70% next fiscal year.
- Renewable energy generation poised for 18-20% annual growth.
- Coal-based plants remain crucial for grid stability.
For the first time, India's electricity generation is expected to see thermal power's share fall below 70% in the next fiscal year. This significant shift is occurring as renewable energy generation surges, projected to grow at a compound annual rate of 18-20% over the current and next fiscal years. This expansion is fueled by substantial capacity additions in solar and wind projects.
While renewable sources are set to meet most of the country's incremental power demand, thermal power, particularly coal-based capacity, continues to play a crucial role in ensuring grid stability. This is attributed to the intermittent nature of renewable energy and the early stages of energy storage adoption in India.
This evolving power mix is also influencing financial aspects, with increased long-term power purchase agreements for thermal capacity providing revenue visibility. Despite the declining share in generation, the foundational role of thermal power in maintaining a stable grid remains prominent.
