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Indian power sector presents Rs.40 trn investment potential
Articles- Feb 07,25
India power sector has the potential for investment of Rs.40 trillion driven by fast-growing consumption over the next decade.
India power sector has the potential for investment of Rs.40 trillion driven by fast-growing consumption over the next decade. Data centres and electric vehicles (EVs), which currently contribute minimally to India’s power demand, will account for one-third of the country’s power demand growth by 2035, reports ANI citing a Motilal Oswal report. “Today, EVs and data centres have a negligible share in India’s power consumption. However, by 2035, they are expected to drive around one-third of the overall growth in power demand,” the report noted.
The report also projects that India’s data centre capacity will grow at a compound annual growth rate (CAGR) of 30 per cent over the next decade. Additionally, it estimates penetration rates of 60 per cent for two-wheelers (2Ws), 20 per cent for passenger vehicles (PVs), and 20 per cent for commercial vehicles (CVs) in new vehicle sales by the end of this period.
Highlighting immense growth prospects, the report estimates that India’s power sector will offer an investment potential of ?40 trillion over the next decade, driven by increasing demand, infrastructure upgrades, and the transition to clean energy.
The report pointed to “triple tailwinds” that will make the sector attractive to investors:
- Power demand is rising at a 7 per cent CAGR, up from the previous 5 per cent
- Aging power infrastructure requires upgrades and replacements to accommodate a growing share of renewable energy
- India’s goal of achieving 500 GW of renewable energy capacity by 2030
The report emphasised that India’s case is unique, with strong drivers like real GDP growth, technological advancements, and ongoing electrification contributing to sustained power demand growth in the long term.
It further underscored that India’s power consumption is expected to grow at a 7 per cent CAGR over the next decade, supported by emerging drivers like EVs, data centres, and the overall electrification of energy needs.
In terms of future opportunities, the report favoured investments in renewable energy generation and transmission over thermal power.
It warned of the potential risks associated with the private sector’s limited participation in thermal power projects, which could lead to delays and execution challenges. “The transmission sector presents a promising opportunity, with Power Grid’s ?2 trillion capex plans likely to expand further,” the report noted.
The report also mentioned the potential for growth in energy exchanges due to expanding generation and transmission infrastructure and the launch of new market products. However, it cautioned that regulatory risks related to market coupling could be challenging to predict.
India power sector
investment
Data centres
Motilal Oswal report
commercial vehicles
CAGR
renewable energy
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