Has India’s Power Sector Added 5.2 GW Capacity in July? 36 GW Solar Capacity Addition Expected in FY26: Report
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Synopsis
India's power sector is experiencing a remarkable surge in capacity, with a significant addition of 5.2 GW in July. This growth is driven by strong policy support and an expected 36 GW of solar capacity by FY26! Explore how these developments impact the future of energy in India.
Key Takeaways
- India added 5.2 GW capacity in July.
- Strong policy incentives drive growth.
- Projected 36 GW solar capacity addition in FY26.
- Power demand increased 4.4% YoY in August.
- Concerns about grid stability with rising renewables.
New Delhi, Sep 3 (NationPress) India's power sector has witnessed a significant boost in capacity during July, driven by robust policy incentives, with an addition of 2 GW of conventional and 3.2 GW of renewable energy sources, according to a report released on Wednesday.
This growth has escalated year-to-date (YTD) additions in FY 26 to 21 GW, as per an HSBC Global Investment Research report.
The report forecasts the commissioning of 11.7 GW of thermal energy, 3.8 GW of hydropower, and a remarkable 36 GW of solar power throughout FY26. Overall power demand surged by 4.4 percent YoY in August and over 2 percent in July, following a low base.
"However, it is crucial to highlight that, despite the growth observed last month, power demand has not exceeded the peaks of August 2023. This underscores the significance of weather-related disruptions in shaping India's power demand, which weighs more heavily than manufacturing-led growth," the report elaborated.
Cooler weather conditions resulted in a decline in thermal plant load to 64 percent Plant Load Factor (PLF), marking the lowest July figure in a decade.
The increasing share of renewable energy (excluding hydro) raises concerns regarding grid stability and the acceptability by state discoms, unless there is a swift uptick in battery installations, the HSBC report emphasized.
In July, renewables, excluding hydro, accounted for 20 percent of total generation, while hydro contributed 13 percent. Wind energy made up 10 percent of generation, whereas solar energy lagged at 7.3 percent due to rain.
"We believe that enhancing battery storage is the optimal solution due to its rapid commissioning capabilities (unlike pumped storage)," the firm noted. The government has extended both policy and fiscal support, with recently discovered storage tenders (the latest at INR 6.64/kWh of storage-based power) appearing promising," the report stated.
Chinese anti-innovation policies have inflated cell prices, while module prices have remained stable, suggesting an overcapacity in the system.
Point of View
I recognize the significance of these developments within India's power sector. The growth in capacity, especially in renewable energy, indicates a positive trend towards sustainability. However, it is crucial to address challenges like grid stability and battery storage to ensure a reliable energy future for the nation.
NationPress
03/09/2025
Frequently Asked Questions
What was the total capacity added by India’s power sector in July?
India's power sector added a total capacity of 5.2 GW in July, comprising 2 GW of conventional power and 3.2 GW of renewable energy.
What is the expected solar capacity addition for FY26?
The report projects an expected addition of 36 GW of solar capacity during FY26.
How much did overall power demand increase in August?
Overall power demand saw an increase of 4.4 percent Year-on-Year (YoY) in August.
What challenges does the increasing renewable share pose?
The rising share of renewables raises concerns about grid stability and the acceptability of state discoms.
What has been the impact of cooler weather on thermal plant load?
Cooler weather led to a reduction in thermal plant load to 64 percent Plant Load Factor (PLF), the lowest for July in ten years.
