IEA’s Electricity 2024 Report
According to the latest International Energy Agency (IEA) projections in Electricity 2024 Report, India’s electricity demand will outpace China’s and have the world’s fastest growth rate by 2026.
India’s annual average electricity demand growth is pegged at 6.5% over 2024-2026. The robust expansion will make India’s additional electricity demand over the next three years almost equivalent to the UK’s total demand.
Coal Dominance to Continue
Coal will meet 68% of India’s electricity needs in 2026, as per IEA forecasts. While lower than coal’s 74% share in 2023, this highlights its continued dominance despite renewable growth.
India added 21 GW of renewable energy capacity in 2023. But renewables stagnated at a 21% generation share as reduced hydropower output offset solar and wind growth.
Key Growth Drivers
Rapid economic expansion and increased cooling needs are major electricity demand growth drivers. Weather fluctuations also periodically spike demand – a hot and dry August 2022 led to record power consumption exceeding 240 GW.
To guarantee supply amidst peaks, the government mandated blending at least 6% imported coal until March 2024. Domestic coal remains the mainstay for baseline generation.
Nuclear and Hydro Push
Alongside further wind and solar additions, India is also expanding hydro and nuclear generation to diversify its energy mix.
Over 11.5 GW of stalled private hydro projects were transferred to public sector firms under the Power Ministry in 2023 for revival. Nuclear capacity is planned to triple by 2032, with 4 GW likely coming online over 2024-2026.
Asia Nuclear Growth Leader
With China and India leading new reactor construction, Asia’s nuclear generation will exceed North America’s by 2026.
China started the world’s first fourth-generation reactor in 2023, highlighting its advances. India powered up its largest 700 MW domestic reactor last June and expects rapid nuclear growth.
Net Zero Balancing Act
Even as India pushes clean energy to achieve its 2070 net zero target, rising electricity needs means coal will remain indispensable in the medium term.
Managing the transition without sacrificing growth and development requires a balancing act. Boosting domestic manufacturing and maintaining supply security is vital alongside green investments.
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