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New Delhi (India), September 8 (ANI): India’s power generation and transmission sector is poised for significant growth and as the country enters a phase of capital expenditure-led GDP growth, energy intensity is expected to increase, Jefferies said in its latest September report.

The US company noted that energy intensity will be key to sustaining economic growth as GDP increases at a rapid pace.

It also added that energy consumption is expected to increase by more than 7 percent per year.

The report projects that by FY30, India’s total generating capacity will need to increase from 442 GW in FY24 to 673 GW to avoid capacity shortages. This expansion will drive further investment in thermal power, which is expected to play a key role in maintaining grid stability, the report added.

The country’s thermal power plants, whose capacity utilisation factor is currently around 65-70 per cent, will play a key role in meeting this demand.

Average annual efficiency of thermal power plants is expected to exceed peak levels seen in fiscal year 2008 by fiscal year 2028, with heat utilization rates reaching 74 percent by fiscal year 2025.

However, it was also emphasised that peak power deficits are becoming more frequent, which is caused by many years of underinvestment in this sector.

To prevent regular power shortages, the focus will be on accelerating capacity additions and increasing investment in transmission and distribution (T&D) equipment, Jefferies said.

The report said that significant capacity additions are predicted, especially for thermal power plants, where the annual rate of addition is expected to rise to 17 GW from the current 2-5 GW.

As with traditional energy sources, the power of renewable energy will also grow rapidly.

Annual renewable energy capacity additions are expected to increase 3.5-fold during fiscal years 2024-2027 compared to fiscal years 2010-2020.

India has set a target of achieving 450 GW of renewable energy by 2030.

The electricity transmission sector is also expected to see significant growth, with the number of offers increasing seven-fold over the past three years.

In February 2021, the pipeline was estimated to be worth less than Rs 150 billion, but projects worth Rs 1 trillion are currently up for tender.

According to the report, this rapid expansion will be driven by the government’s push to expand renewable energy capacity, as well as growing demand for storage, green hydrogen, data centers and electric vehicle infrastructure. (ANI)

This report is generated automatically by ANI news service. ThePrint is not responsible for its content.