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Key Points

India's power demand is set to skyrocket to 335GW by FY30, requiring 780GW capacity. Renewables will dominate growth, but thermal power remains crucial for grid stability. Private players are leading renewable investments while the government focuses on thermal expansion. The solar sector faces execution challenges despite strong financial projections for the industry.

Key Points: India Power Capacity to Hit 780GW by FY30 with 10% Growth Says UBS

  • UBS forecasts 305GW power capacity addition in next 5 years
  • Renewables lead but thermal to ensure grid stability
  • Private sector driving renewable investments
  • Solar manufacturing faces 40% execution gap despite demand
2 min read

India's power generating capacity to reach 780GW by FY30 with annual growth of 10%: UBS Report

UBS report predicts India's power demand surge to 335GW by FY30, requiring 780GW capacity with 10% annual growth driven by renewables and thermal expansion.

"As long as the economics are favourable, the private sector will likely continue to invest in renewable energy generation – UBS Report"

New Delhi, August 13

India's peak power demand is set to rise sharply in the coming years as the country's electrification drive gathers pace, with total demand expected to hit 335 gigawatts (GW) by FY30.

UBS Research estimates that India will require a total power generation capacity of 780GW by FY30, implying an annual growth of 10 per cent, faster than the 6 per cent average GDP growth recorded between FY15 and FY25. The link between GDP and power demand is also shifting. Historically, peak power demand grew at 0.85 times the rate of real GDP growth, but with increased electrification across industries and households, this is expected to rise to nearly 0.92 times.

The next five years are projected to see the addition of 305GW of power generation capacity, three times the capacity added between FY20 and FY25. While most of this will come from renewable sources like solar and wind, UBS Research notes that thermal power will still be essential to ensure grid stability when renewables are not generating.

The forecast comes with a call for a fresh wave of investments in power generation to meet this growing need. Earlier, India's power generation was dominated by thermal plants owned mainly by the government and state-owned enterprises. But the renewable energy boom has seen more private players step in.

"As long as the economics are favourable, the private sector will likely continue to invest in renewable energy generation, whereas the government will continue to invest in thermal energy," the report stated.

Thermal plants are expected to contribute around 40 per cent of new power generation over the medium term, with the government targeting the addition of about 80GW of thermal capacity by FY32.

At the same time, the report stated that the solar manufacturing sector faces challenges. Given the heavy capital and technology requirements, UBS Research estimates that only about 60 per cent of the announced solar cell capacity will be commissioned.

The industry's financial outlook appears strong, the research projects the overall profit pool for the power sector to grow at a 30 per cent compounded annual rate (CAGR) over FY25 to FY30, with companies in its coverage universe expected to deliver revenue growth of 34 per cent and earnings growth of 46 per cent over FY25 to FY28.

- ANI

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Reader Comments

P
Priyanka N
While the renewable energy push is commendable, I'm concerned about the continued reliance on thermal power. We've seen how pollution affects our cities. Shouldn't we be more aggressive with solar and wind investments?
A
Aditya G
The private sector involvement is key here. With proper policies and incentives, we can attract global investments in renewable energy. This could be a game-changer for our economy and create lakhs of jobs!
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Sarah B
As someone working in the energy sector, I appreciate the balanced approach. Renewables are the future but we can't ignore grid stability needs. The 80GW thermal addition seems practical for now. Good analysis by UBS.
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Karthik V
Hope the government focuses on rural electrification too. Many villages still face 8-10 hour power cuts. If we're talking about 780GW capacity, let's ensure equitable distribution across all regions.
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Michael C
The solar manufacturing challenges mentioned are concerning. India should invest more in R&D and technology transfer to become truly self-reliant in this sector. Otherwise we'll keep depending on Chinese imports.

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