India’s Power Sector: A 2.2x Surge in Growth and Defence Spending Forecast to Reach 13% CAGR
India's power sector is experiencing monumental growth, with projections indicating a 2.2x increase in power generation and transmission sectors by 2030. This surge is primarily rooted in capex-driven GDP growth, as stated by Jefferies in their latest report.
Power Generation and Economic Growth
Power intensity is crucial for sustaining economic growth, with GDP expanding rapidly. It is anticipated that power consumption will exceed 7% annual growth, necessitating a boost in total power generation capacity from 442 GW in FY24 to 673 GW by FY30 to prevent shortages.
Investment in Thermal and Renewable Energy
The report underscores the significance of thermal power in maintaining grid stability, with current plant load factors hovering around 65-70%. Capacity additions are projected to escalate, particularly in thermal power, where the annual addition rate is set to rise from 2-5 GW to 17 GW. The renewable energy sector is also expected to see a 3.5x increase in annual capacity additions by 2027.
Expansion of Power Infrastructure
The power transmission sector is primed for substantial growth, with a seven-fold increase in the bid pipeline recently, which is now valued at Rs 1 trillion. This expansion aligns with governmental efforts to enhance renewable energy capacity and increase support for storage and electric vehicle infrastructure.
Defence Sector Growth Potential
Aligned with this trajectory, India's defence sector is forecasted to grow at a 13% CAGR from FY2024 to FY2030, propelled by increased domestic production and geopolitical factors driving revenue growth for local companies.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.