New Delhi: The demand for power in the country is expected to grow in the range of 6-6.5 percent over the next five years, a report said on Wednesday. This growth will be attributed to a rise in adoption of electric vehicles and green hydrogen segments along with strengthening of data centre capacity, ICRA said in a note. The generation capacity addition is projected to reach an all-time high of 44 GW in FY2026.
In a webinar, Vikram V, Vice President & Co-Group Head - Corporate Ratings at ICRA, said, "Over the next five years, ICRA expects the electricity demand to achieve a CAGR (compound annua growth rate) of 6-6.5 per cent, driven by the demand from rising adoption of electric vehicles (EVs), green hydrogen (GH) and the increase in data centre capacity."
These three segments are expected to contribute to 20-25 percent of the incremental demand over the next five-year period from FY2026 to FY2030, he said.
Vikram said the growth in demand for grid capacity is expected to be offset to some extent by the rising adoption of rooftop solar and off-grid projects, driven by schemes such as the Pradhan Mantri Surya Ghar Yojana.
Further, ICRA said it expects the generation capacity addition to reach an all-time high of 44 GW in FY2026, a sharp step up from the previous high of 34 GW in FY2025, with the overall installed power generation capacity reaching close to 520 GW by March 2026.
The thermal segment is expected to add 9-10 GW capacity in FY2026, with the balance largely contributed by the RE (renewable energy) segment. While RE will remain the key driver of the generation capacity addition, going forward, the thermal segment has seen an increase in under-construction capacity over the past 12 months and currently stands at over 40 GW. Additionally, ICRA said that it maintains a stable outlook on the thermal power segment.