Indian Power Sector Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

India Power Market Analysis

The India Power Market size in terms of installed base is expected to grow from 536.23 gigawatt in 2025 to 817.52 gigawatt by 2030, at a CAGR of 8.8% during the forecast period (2025-2030).

India's power sector is undergoing a significant transformation driven by rapid industrialization and urbanization. The sector has witnessed substantial growth in power infrastructure development, with major investments flowing into both conventional and renewable power sources. As of November 2023, India's installed capacity for renewable energy reached more than 132 GW, excluding hydropower, demonstrating the country's commitment to sustainable energy solutions. The power generation landscape has evolved to accommodate diverse energy sources, including thermal, hydro, nuclear power, and renewable energy, creating a more balanced and sustainable energy mix.

The transmission and distribution infrastructure has shown remarkable progress in recent years, reflecting the sector's modernization efforts. In fiscal year 2023, India surpassed its power transmission line target by adding 14,625 circuit kilometers (ckm) of lines, compared to the set target of 14,581 ckm. Private sector participation has been particularly noteworthy, with private entities contributing 3,883 ckm of transmission lines in FY23, marking one of the highest annual achievements in recent years. This expansion has significantly enhanced the power grid's capability to handle increasing electricity demands and integrate renewable energy sources.

The nuclear power segment is experiencing substantial growth as part of India's diversification strategy. The sector has set ambitious targets to increase its nuclear power generation capacity from 7,480 MW in 2023 to 22,480 MW by 2031, highlighting the country's commitment to expanding its clean energy portfolio. This expansion is supported by technological advancements and international collaborations, particularly in areas such as reactor design and safety systems. The focus on nuclear power demonstrates India's approach to ensuring energy security while maintaining environmental sustainability.

The power generation sector has demonstrated robust operational performance, with major players achieving significant milestones. NTPC, India's largest power utility, recorded an impressive power generation of 399.2 BU in FY 2022-23, marking an 11% growth compared to the previous year. The sector has also witnessed increased adoption of digital technologies and automation, improving operational efficiency and grid reliability. These technological advancements, coupled with infrastructure modernization efforts, have contributed to reduced transmission losses and improved power quality across the network.

India Power Market Trends

Supportive Government Initiatives and Policies to Adopt Renewable Energy

The Indian government's comprehensive policy framework and ambitious renewable energy targets serve as a fundamental driver for the power market's growth. The government has established an unprecedented target of achieving 500 gigawatts (GW) of installed renewable power capacity by 2030, with specific allocations of 280 GW for solar power and 140 GW for wind power sources. This commitment is supported by flagship programs like the National Solar Power Mission and National Wind Power Energy Mission, which provide structured frameworks for implementation. The government's dedication is evident in its March 2023 announcement to establish Ultra Mega Solar Power Parks with a combined generation capacity of 40 gigawatts by March 2024, demonstrating a clear roadmap for renewable power infrastructure development. Additionally, the Ministry of New and Renewable Energy announced plans in April 2023 to add 250 GW of renewable power capacity in the next five years, inviting bids for 50 GW of renewable energy capacity annually from FY 2023-24 till FY 2027-28.

The government has implemented various financial incentives and regulatory frameworks to accelerate renewable power adoption. These include capital subsidies, generation-based incentives, tax benefits, and viability gap funding to make renewable projects financially viable. A significant policy reform was introduced through the 2021 net metering amendments, which allow prosumers with loads up to 500 kW to benefit from net metering arrangements, while loads exceeding 500 kW are subject to gross metering. The policy framework extends to state-level initiatives, with states like Rajasthan setting ambitious targets - in October 2023, Rajasthan announced its renewable energy policy 2023, increasing its solar power target from 30,000 MW to 65,000 MW by March 2030. Furthermore, the government provides Central Financial Assistance (CFA) of up to INR 2.5 million per solar park for Detailed Project Report preparation and up to INR 2 million per MW for project costs, demonstrating comprehensive financial support for power infrastructure development.

Segment Analysis: By Power Generation

Thermal Segment in India Power Market

The thermal power segment continues to dominate India's power generation landscape, holding approximately 55% of the total installed capacity in 2024. This substantial market share is supported by the country's extensive coal reserves and established thermal power infrastructure. The segment's dominance is reinforced by the presence of major operational projects like the Mundra Ultra Mega Power Plant (4,000 MW), Sasan Ultra Mega Power Plant (3,960 MW), and Talcher Super Thermal Power Plant (3,000 MW). The thermal sector's stability is further evidenced by ongoing capacity additions, with significant projects under construction including the Ghatampur Thermal Power Plant and various ultra-supercritical technology implementations across different states.

Renewables Segment in India Power Market

The renewables segment is demonstrating remarkable growth potential in India's power generation market, with an expected growth rate of approximately 10% from 2024 to 2029. This expansion is driven by ambitious government initiatives targeting 500 GW of renewable energy capacity by 2030. The segment's growth is supported by significant investments in solar parks, wind energy projects, and hybrid power installations. The government's commitment is reflected in recent policies such as the National Solar Mission and various state-level renewable energy initiatives. The sector's advancement is further bolstered by technological improvements, declining installation costs, and increasing private sector participation in renewable energy projects.

Remaining Segments in Power Generation Market

The hydropower and nuclear power segments play crucial complementary roles in India's power generation mix. The hydropower sector contributes to grid stability and peak load management, with major projects operational across various states and new installations planned. The nuclear power segment, while smaller in capacity, represents a strategic component of India's energy security framework, with several new reactors under construction and planned expansions at existing facilities. Both segments contribute to the country's clean energy objectives and help maintain a balanced power generation portfolio, particularly important for meeting base load requirements and managing grid stability.

Segment Analysis: Power Transmission and Distribution (T&D) Network

Transmission Segment in Power T&D Network Market

The power transmission segment represents a crucial component of India's power T&D network, characterized by its extensive network of high-voltage power lines and substations. This segment has demonstrated significant development with the addition of 14,625 circuit kilometers of transmission lines in FY2023, exceeding the set target of 14,581 ckm. The private sector has shown remarkable performance in power transmission line development, contributing 3,883 ckm through ISTS schemes under the TBCB route. The segment's infrastructure includes various voltage levels, with 220kV lines comprising approximately 63% of the total market. Major developments include the implementation of high-voltage direct current (HVDC) transmission systems and the ongoing execution of transmission projects for integrating 66.5 GW of renewable energy zones across multiple states including Rajasthan, Gujarat, Maharashtra, and Tamil Nadu.

Distribution Segment in Power T&D Network Market

The power distribution segment is experiencing rapid transformation through the implementation of the Revamped Distribution Sector Scheme (RDSS), which has been allocated a substantial budget of INR 3037.58 billion for the period from FY 2021-22 to FY 2025-26. This segment is witnessing accelerated growth through modernization initiatives focusing on smart metering, system metering, and distribution infrastructure development. The segment's expansion is driven by initiatives to reduce Aggregate Technical and Commercial (AT&C) losses to 12-15% and minimize the gap between Average Cost of Supply and Average Realizable Revenue by 2024-25. The implementation of advanced technologies, including prepaid smart metering systems and modern power distribution infrastructure, is transforming the efficiency and reliability of power distribution networks across the country.