Mumbai: India’s power consumption could increase to 3,000 TWh by 2030, growing at a healthy pace of about 10 per cent according to a recent report by Vikas Gupta, smallcase Manager & CEO at OmniScience Capital, a Mumbai-based global investment firm.
“The power sector in India has witnessed a major turnaround post-Covid, with power consumption growing at an annualised rate of about 10 per cent from FY21 to FY24 which is expected to continue till 2030,” said the company.
According to the investment company, the growth in power consumption will be in sync with India’s nominal GDP growth which is expected to cross $7 trillion by 2030.
The report also highlighted a strong expansion in both the residential and commercial segments, supported by new demand from the greenfield power consuming industries, such as electric vehicles and data centres.
The report noted that with nearly four million EVs sold in India by March 2024, India’s EV market is in the midst of an explosive growth phase.
It said that with fossil-fuel prices rising and global EV battery prices expected to keep falling till 2030, the total cost of EV ownership would fall further. This increasing cost effectiveness vis-à-vis traditional vehicles will be the primary factor that drives EV adoption in India in future, it added.
“EVs will dominate Indian roads by 2030… With an anticipated total power consumption of about 100 TWh by 2030, EVs have the potential to rank among the nation’s single largest power consumers,” said Gupta.
He added that companies in the Indian power sector ecosystem have witnessed robust revenue growth and growing return-on-equity in the past five to six years, driven by a clean-up of stressed power assets, higher capacity utilisation, and multi-decadal infrastructure policies aimed at doubling India’s installed capacity by 2030.
The report said that the data centers’ market in India is expected to grow exponentially as Data Protection and localisation is prioritised. The expected power consumption of over 100 TWh by 2030 would make data centers one of India largest power consumers.
“Along with greenfield consumers, India’s domestic and industrial power consumption will also see a boost through multiple multi-decadal infrastructure plans such as the National Infrastructure Pipeline and the National Logistics Policy, reducing the logistics cost from 14 per cent of GDP to close to the global average at 8 per cent,” it said.
With 71 per cent of India’s power generation capacity addition in FY24, accounted for by renewable energy – the nation is in line to push renewable installed capacity to near 500-GW target by 2030.
“India would require more than 300 GW of extra renewable capacity — up from the current 144 GW — to meet its major energy commitments,” the report added.
It further added that power financing is in its healthiest phase in India.
“Adequate financing of power generation projects – led by renewable energy – will be instrumental in achieving the near-doubling of installed capacity in India by 2030. For power-finance businesses, non-performing assets (NPAs) have been steadily declining,” it said.
It added that in FY24, net NPAs were expected to be less than one per cent. Between FY22 and FY27, investments totalling over Rs 14.5 lakh crore are projected to be made in order to build the necessary installed capacity by 2030.
