Companies have erected a record 52.53 GW of power producing capacity in the nation thus far this fiscal year, in response to the nation’s increasing power demand. In FY25, the previous record was roughly 34 GW.
39.65 GW of the total capacity installed thus far this fiscal year came from renewable sources, according to a statement from the electricity ministry. During the time under review, 8.8 GW of coal-based capacity was installed.
“A record 52,537 MW of generation capacity (from all sources) has been added during the current financial year 2025–26 (up to 31 January 2026).” Renewable energy sources have contributed 39,657 MW of this, including 4,613 MW of wind power and 34,955 MW of solar power, the statement stated.
With this increase, India’s total power generation capacity is approximately 520 GW, of which 248.54 GW are based on fossil fuels, such as coal and gas, and 271.97 GW are based on non-fossil fuels, such as nuclear and renewable energy. The administration wants to reach net zero carbon emissions by 2070 and an ambitious 500 GW of non-fossil capacity by 2030.
Furthermore, India faced a near-crisis as a result of low local coal stocks after the unanticipated spike in power consumption in 2022 and 2023, which was caused by post-COVID pent-up demand from businesses and commercial buildings.
Since coal continues to be the dominant source of baseload capacity, the Center has responded by planning to boost thermal power capacity during the previous few years in order to satisfy immediate demand. By FY34, India intends to increase its thermal power capacity by 97 GW.
Green energy in a difficult situation
With some states, including Uttar Pradesh, Bihar, Assam, and West Bengal, signing coal-fueled power purchase agreements (PPAs) at higher pricing than those of renewable energy projects, India’s green energy sector is likewise experiencing difficulties.
Additionally, as Mint has reported, 43 GW of green power capacity, which would require a proposed investment of ₹2.1 trillion, does not currently have power purchase agreements (PPAs) or power supply agreements (PSAs) in place. Furthermore, two of the nation’s biggest solar power-producing states, Gujarat and Rajasthan, have reduced their green power production.
The rise in capacity addition coincides with estimates that India’s power demand will grow by roughly 4% annually over the coming years. By 2040, consumption is expected to double from its current levels. However, a longer-than-expected monsoon has restrained the growth of power demand in FY26.
According to a recent Crisil assessment, power demand is expected to have climbed by a slight 0.9% year over year over the April–January period. Despite a muted summer demand surge, a cold wave in northern India this year caused a spike in winter demand.
January 2026 saw the highest January consumption since at least 2010, with power demand rising 4.5% year over year to 143 billion units (BU) from 136 BUs the previous year. The intense cold wave conditions in the northern and eastern regions during the month boosted heating demand.
Parts of west and northwest India experienced weekly average minimum temperatures that were 2-4 degrees Celsius below normal from January 8 to January 14. According to the Crisil data, the northern region’s power demand rose 5.5% year over year.
Additionally, power demand peaked in January 2026 at 245 GW, above the previous summer peak of 243 GW in June 2025.
Given the intermittent nature of renewable power sources, bolstering the transmission grid and installing energy storage capacity are also necessary to meet the increasing demand for power and integrate more renewable capacity while maintaining grid stability.
Grid digitization
“India must hasten the digitalization of its grid to satisfy the growing power demand and enable large-scale renewable integration,” stated a paper published last week by NITI Aayog on scenarios for Viksit Bharat and net zero. This entails automating substation operations, implementing centralized control via Supervisory Control and Data Acquisition (SCADA) and remote monitoring tools, and modernizing current infrastructure with real-time monitoring systems.”
There will be a rise in industrial and commercial demand due to economic growth expectations. Future demand growth will also be fueled by emerging markets like transportation, where an increasing number of electric vehicles are being used.
According to the NITI Aayog report, the main route to low-carbon growth should be electrification of buildings, transportation, cooking, and industrial heating. Concurrently revamping the electrical system to provide scale, flexibility, and dependability can help achieve this change, it stated.
