India Emerges as Third-Fastest in Power Generation Growth, Only Behind US and China

According to a report by the International Energy Agency (IEA), India has grown its power generation the third fastest in the past five years. During this period, India only lagged behind the US and China.

Key reasons for the growth include rising rural electricity demand and clean energy initiatives. Commercial and residential construction has expanded, resulting in increased demand for appliance ownership, particularly air conditioners. India has also been instrumental in adopting renewable and green energy alternatives. Over half of non-fossil investments in the past five years were directed to solar PV, with 83% of 2024 power-sector investment flowing into clean energy.

Momentum and Challenges

With the solar PV push, India is among the top global wind and solar power generators. However, the conventional challenges persist as coal still fulfills around 66–75% of domestic energy demand; coal-fired capacity continues to grow alongside renewables.

Global Context

India’s growth aligns well with the global developments. China is still a leader in absolute renewable energy expansion, whereas India has demonstrated the highest national growth rate through 2026. India’s CO2 contribution in the Asia-Pacific region was around 10% of the total emissions.

Future Outlook

India’s power sector is all set for a dynamic and dual-paced expansion. The growing dependence on solar and other renewable sources is evident in public and private sector initiatives. IEA predicts that India will continue leading in renewable capacity additions through 2026.

At the same time, the country’s coal-based power generation will continue due to population growth, industrialization, and urbanization. India needs to invest in renewable and traditional energy generation by strengthening grid infrastructure, improving energy storage systems, and ensuring last-mile integration.

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