09 Sep 2024
India's power generation and transmission sectors are set for significant growth, driven by capex-fueled economic expansion, according to Jefferies' September report. The sectors are expected to increase 2.2 times, reaching USD 280 billion between FY24 and FY30, compared to FY17-23.
The report highlights that rising power intensity is crucial for sustaining rapid GDP growth, with power consumption anticipated to grow over 7% annually. By FY30, India’s total power generation capacity must expand from 442 GW to 673 GW to prevent shortages. This will necessitate further investment in thermal power, which is crucial for grid stability. Currently operating at 65-70% plant load factor (PLF), thermal plants are expected to see improved utilization, with annual PLF surpassing FY08 peaks by FY28.
To address increasing power deficits and prevent shortages, the focus will be on accelerating capacity additions and investing in power transmission and distribution (T&D) equipment. Annual thermal power capacity additions are projected to rise from 2-5 GW to 17 GW. Meanwhile, renewable energy capacity is expected to grow 3.5 times between FY24 and FY27 compared to FY10-20, with a target of 450 GW by 2030.
The power transmission sector will also experience significant growth, with the bid pipeline increasing seven-fold from less than Rs 150 billion in February 2021 to Rs 1 trillion currently. This expansion is driven by government initiatives to boost renewable energy, storage, green hydrogen, data centers, and electric vehicle infrastructure.
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