India's Electricity Demand to Outpace Overall Energy Demand by 2035; Data Centres, Green Hydrogen to Drive Growth: S&P Global

New Delhi, Oct 15 (KNN) India's electricity demand is expected to grow significantly faster than overall energy demand over the next decade, with consumption by data centres and green hydrogen production projected to rise nearly ninefold to around 240 terawatt-hours (TWh) by 2035, according to S&P Global.

The report noted that the shift towards electricity was already underway, with electric vehicles reducing dependence on fossil fuels. Greater adoption of electric vehicles and green hydrogen-based production processes are expected to drive the transition.

It attributed the shift to rising industrialisation, higher incomes, growing appliance ownership and increasing demand for cooling.

“India's energy growth story is becoming more electric, with electricity demand expected to grow much faster than energy demand between 2025 and 2035, at 5.56 per cent and 2.47 per cent, respectively. Electricity's share in the total energy basket could rise to nearly 25 per cent by 2035, from about 19 per cent in 2025,” the ratings agency said, ANI reported.

Data Centres And Distributed Power Generation

Data centres and green hydrogen production are expected to emerge as major sources of additional electricity demand, with their combined consumption projected to reach around 240 TWh by 2035.

While the electricity grid will remain the primary source of power, distributed generation is expected to account for a growing share of consumption. Its contribution could rise to around 16 per cent by 2035, from 13 per cent in 2025, S&P Global said.

Pressure On Power Infrastructure

The agency cautioned that rising consumption and increasingly unpredictable demand patterns would put additional pressure on India's power infrastructure.

Meeting the requirements reliably would need a diversified energy supply mix, stronger transmission and distribution networks, energy storage and flexible power generation and market mechanisms.

India has already achieved its 2030 Nationally Determined Contribution (NDC) target of sourcing 50 per cent of cumulative installed power capacity from non-fossil fuel sources ahead of schedule. The target has been raised to 60 per cent by 2035.

However, S&P Global noted that early progress on installed capacity targets would shift the focus towards ensuring reliable power supply, integrating renewable energy and strengthening grid infrastructure.

(KNN Bureau)