ICRA Projects 6-6.5% Annual Electricity Demand Growth Through 2030

New Delhi, May 29 (KNN) The Investment Information and Credit Rating Agency (ICRA) projected on Wednesday that electricity demand in India will grow by 6.0–6.5 percent annually over the next five years, driven by the rapid adoption of electric vehicles, expansion of data centers, and the development of the green hydrogen sector. 

The rating agency identified these three segments as contributing 20-25 percent of incremental demand during the FY 2026-30 period.

The electric vehicle sector is anticipated to experience substantial penetration across multiple categories, with three-wheelers leading adoption rates, followed by two-wheelers, electric buses, and passenger vehicles. 

This transition represents a significant shift in energy consumption patterns as transportation electrification gains momentum across India's automotive landscape.

ICRA's analysis suggests that demand growth will face partial offset from increased rooftop solar installations and off-grid renewable projects, particularly those supported by government initiatives such as the Pradhan Mantri Surya Ghar Yojana. 

This distributed energy generation represents a structural change in how electricity consumption and production patterns are evolving across the country.

The agency forecasts a healthy thermal plant load factor of 70 percent for fiscal year 2026, supported by projected demand growth of 5.0-5.5 percent. 

Power generation capacity additions are expected to reach a record 44 gigawatts in FY2026, representing a substantial increase from 34 gigawatts added in FY2024.

Vikram V, Vice President and Co-Group Head, Corporate Ratings, ICRA, noted that capacity expansion will encompass both renewable and thermal energy sources. 

The thermal segment is projected to contribute 9-10 gigawatts of new capacity in FY2026, while renewable energy sources will account for the remaining additions. 

(KNN Bureau)