India’s power demand is projected to grow by 6.0–6.5 per cent annually over the next five years, driven by accelerating electric vehicle (EV) adoption, rapid expansion of data centres, and the development of green hydrogen projects, according to ICRA.
“These three segments are expected to contribute to 20–25 per cent of the incremental demand over the next five-year period from FY2026 to FY2030,” said Vikram V, Vice President & Co-Group Head – Corporate Ratings, ICRA, quoted by ANI. However, he also claimed that this rising demand for grid capacity could be partially offset by the increasing uptake of rooftop solar and off-grid solutions, aided by initiatives like the Pradhan Mantri Surya Ghar Yojana.
The report highlights that the EV sector will see broad-based growth, led by three-wheelers, followed by two-wheelers, electric buses and passenger vehicles.
For FY2026, ICRA expects a strong thermal plant load factor of 70 per cent, backed by a projected power demand growth of 5.0–5.5 per cent. Total power generation capacity is forecast to rise to 44 GW in FY2026, up from 34 GW in FY2024, with contributions from both renewable and thermal sources.