SINGAPORE: India’s electricity generation grew at its slowest pace in 2024 since the COVID-19 pandemic, an analysis of federal grid regulator data showed, hit by a slowdown in the world’s fastest growing major economy.
Power output rose 5.8% annually to 1,824.13 billion kilowatt-hours (kWh), an analysis of daily load despatch data from federal grid regulator Grid-India showed.
Growth in power generation averaged 2.3% in the year’s second half, nearly a quarter of the first half’s rise of 9.6%, the data showed.
The slackening electricity generation was in line with a softening economy, which grew at the slowest pace in nearly two years during the quarter that ended on Sept. 30.
The slowdown has not shown signs of easing significantly, with India’s manufacturing activity growing in December at its weakest pace for the year, amid weaker demand.
However, analysts expect a pickup in industrial activity and residential power use stemming from adverse weather to drive growth of 6% to 7% in electricity use in 2025.
“Demand has already picked up in December, with mercury levels dropping and increased usage of heating systems,” said Sooraj Narayan, head of Asia-Pacific power modelling at consultancy Wood Mackenzie.
“Combined with increased industrial production activities, we expect the demand growth rate to be higher in 2025.”
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Slowing electricity demand growth and a rise in the share of renewables to a record 12.1% of power generation helped the world’s third-largest emitter of greenhouse gas snap a three-year streak of gains in the share of coal.
The polluting fuel’s share in India’s power mix fell to 74.4% in 2024, from 75% in 2023.
But the year also saw tepid growth in the renewables sector, with growth of 18.4% in total solar output its slowest since India made international commitments to fight climate change in 2015.
Annual wind power output fell for the first time since 2020, the data showed.
Output from hydropower, India’s second-largest electricity source after coal, rose 4% in 2024, recovering from a plunge of 13.7% in 2023, but its share in total output fell further to 8.6%.
In 2025, analysts expect both the share of coal and renewables to rise at the expense of natural gas-fired power, which rose 17.3% last year.
“We see a declining share of gas in the generation mix this year due to our forecast of higher year-over-year gas prices,” said Kesher Sumeet, senior LNG analyst at Energy Aspects.
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