India's power demand to grow 6% annually, renewable sector robust

A Centrum report projects India's power demand to grow 6% annually over the next 4-5 years, supported by 45-50 GW in yearly renewable capacity additions. Renewable energy firms are expected to post healthy results amid strong domestic demand.

Power Demand to Grow Amidst Renewable Push

India's power demand is expected to grow at around 6 per cent annually over the next four to five years, supported by continued renewable energy capacity additions of 45-50 GW every year, according to a Centrum Institutional Research Q1FY27 power sector results preview report.

"Power demand is expected to grow at 6% pa as we expect renewable capacity additions to continue in the range 45-50 GW per year over next 4-5 years," the brokerage said in its report.

Healthy Performance Expected for Renewable Sector

Against this favourable demand backdrop, the report expects renewable energy companies to post healthy June-quarter performance despite the first quarter typically being a seasonally weak period for renewable energy equipment manufacturers. It added that independent power producers (IPPs) are likely to sustain the growth trend seen over the past few quarters.

Capacity Addition on Track

According to the report, India added 6.8 GW of solar capacity and 712 MW of wind capacity during the first two months of FY27, keeping the country on track to achieve 45-50 GW of renewable energy capacity additions in FY27. The brokerage said solar manufacturers continue to benefit from strong domestic demand and import substitution opportunities, while renewable IPPs are expanding their operational portfolios through faster project commissioning and increasing participation in hybrid renewable, Firm and Dispatch able Renewable Energy (FDRE), and energy storage projects.

Key Growth Drivers and Positive Outlook

The report said, "Industry growth remains underpinned by India's target of achieving approx. 500 GW of non-fossil fuel capacity by 2030, rising power demand, favourable regulatory support, and increasing adoption of BESS solutions."

The report also highlighted the continued rise in electricity consumption, noting that "Power demand continues to see strong growth as India achieved peak power demand of 271 GW in May 2026 vs 242 GW for FY26."

Looking ahead, the brokerage maintained a positive outlook on the sector, citing "capacity expansion, backward integration and growing project pipelines." It added that "Rising corporate decarbonisation commitments, growing demand for RTC renewable power and rapid deployment of battery energy storage systems are further expected to accelerate investment and capacity addition momentum over the medium term."

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