New Delhi, July 31 (NationPress) India's electricity demand is projected to increase by 4 percent in 2025, influenced by cooler summer temperatures during the first half of the year (H1 2025), which have curtailed consumption and shifted the annual peak load to September, according to the International Energy Agency (IEA) in its mid-year electricity market report.

The Paris-based organization noted that global economic uncertainties affected industrial activities in the first half, resulting in a modest 1.4 percent year-over-year increase in demand from January to June 2025.

Nevertheless, a rebound in demand is anticipated in the latter half, aiming for an overall growth rate of 4 percent for the year.

For 2026, the IEA predicts a stronger growth rate of 6.6 percent, driven by heightened industrial and service sector activity alongside greater air conditioner usage.

As per estimates from the Ministry of Power, referenced by the IEA, India's peak electricity load this year could reach 270 GW—an 8 percent increase from last year—and is expected to occur in September rather than during the summer months.

This peak will be supported by expanding generation capacity, as mentioned in the report. The government is also contemplating air conditioner temperature standards between 20°C and 28°C, which could potentially reduce peak demand by as much as 60 GW by 2035.

On the generation side, renewable energy sources exhibited robust growth in the first half of 2025.

The combined output from solar and wind plants surged 20 percent year-over-year, elevating their share in the electricity mix to nearly 14 percent from 11 percent during the same period last year.

Solar PV generation increased by 25 percent, while wind generation soared by nearly 30 percent.

Furthermore, hydropower output rose by 16 percent year-on-year due to better water availability, and nuclear generation grew by 14 percent, aided by the commissioning of the 700 MW Unit-7 at Rajasthan’s nuclear power station in March.

Its counterpart, Unit-8, is anticipated to commence operations in 2025-26, as part of India's strategy to achieve 100 GW of nuclear capacity by 2047 under the Nuclear Energy Mission.

The increase in low-emission power generation, coupled with slower demand growth, resulted in a 3 percent decline in coal-fired electricity generation in the first half of 2025—marking the first such decrease in the first half of a year since 2020.

Gas-fired generation saw a significant decline of around 30 percent, reverting to 2023 levels.

For the entire year, coal-based power output is expected to see a slight increase of 0.5 percent before rising by 1.6 percent in 2026, while gas-based generation is projected to decline by 3 percent in 2025, followed by a 7 percent rebound in 2026.

Nuclear output is anticipated to increase by 15 percent this year and 19 percent next year, while solar generation may grow by 40 percent in 2025 and 28 percent in 2026.

Wind power is expected to experience a growth rate of around 10 percent in both years, with hydropower projected to expand by 7 percent in 2025 and 10 percent in 2026.

The IEA also forecasts that India's emissions intensity will decrease by 3.8 percent annually.