India Power industry is a dynamic industry consisting of various elements from producers, distributors, transmitters to end consumers. India is one of the largest global power producer and consumers.
| All number in GW | FY2025 |
| India power production – Billion units | 1,821 |
| India power capacity – GW | 475 |
| India power capacity – Billion units | 4,163 |
| Peak power demand | 230 |
| Industrial | 42% |
| Commercial | 7% |
| Agri and others | 30% |
| Residential | 24% |
| Average electricity price per unit | 7.11 |
| Residential | 6.47 |
| Business | 10.81 |
| Capacity break up | |
| Coal & Lignite& Gas & Diesel – Thermal | 252 |
| Nuclear | 8 |
| Solar | 103 |
| Wind | 49 |
| Hydro | 57 |
| Others | 11.5 |
| Total | |
| Rooftop capacity – GW | 16.5 |
| Transmission average realization per km | |
| Single circuit (lakh / km) | 0.29 |
| Double circuit | 0.43 |
| Higher ones | 0.7 |
| Ballpark mix (lakh/ km) | 0.45 |
| Battery storage capacity – MWH | 505.6 |
| Circuit kms | 496700 |
| T&D/ AT&C losses | 17% |
Key observations:
Solar and Wind energy are the fastest growing segments in the space. Thermal energy is a very important component as it is the only source (besides nuclear) which provides 24 hour energy. Nuclear plant cannot be shutdown once operational. Solar and wind energy growth leads to an automatic growth of energy storage systems.
India has the worst T&D losses in the world. At part with most of the under developed countries which leads to huge losses for power distribution companies. Companies which manage T&D losses well can have much higher profitability.
Power is a state subject and hence state discoms health and political will play a very important role in the profitability of distribution companies.
India energy storage capacity will need to be in the range of 500 GW in 2030 given that solar and wind will become important components of India energy security. Also, renewable energy 2030 target is around 500 GW as well.
Blended realization is around 7.5 rupees and blended cost for solar is around 2 to 3 rupees and thermal is around 7 rupees. If we add cost of storage of solar in BESS/ PSP – then the cost comes to around 6 rupees for intermittent power which makes it slightly cheaper than thermal. So, it is cleaner and cheaper than thermal.
Power demand growth is expected to be between 7% per annum. Renewable capacity CAGR is around 16%. But one must take this from a perspective that though demand growth is apparently lower, the overall profitability growth will be better because of improving T&D losses, more energy storage.
Key numbers:
Global power demand – 32000 Tera watt hour of which industrial is 42%, residential is 27%; commercial and public services is 21%
Coal is the main power source with 34.4%, Natural gas as 22%, Hydro 14%, Nuclear 9%, Wind 8%, Solar 7%
China – worlds largest power consumer at 2950 Million ton oil equivalent energy (coal : 71%)
US – 2210 MTOE (Oil and gas 69%)
Russia 1516 MTOE (Oil and gas 78%)
India 615 MTOE (Coal 50%)
Saudi Arabia 610 MTOE (Oil and gas 100%)
India – total distance travelled by vehicles is around 15000 billion kms. 40 GW extra power will be required if 5% of this is electrified. So, if we expect by 2030 , 5% distance will be electric vehicle powered, we see a huge demand tailwind from here.
Data centers power consumption currently in the world is 240-340 TWH — 1.5% of total power —– if we assume that power consumption from data center grows in line with major forecasts, world needs additional 622 GW power capacity to power them alone.
India expects to power 30 GW of solar per year – 50 GW solar power per year. This has recently slowed down as most power consumers expect a continuous supply which solar does not give. Hence they are demanding solar + storage solutions rather than solar alone. So for India solar dream to materialize – solar + storage has to pick up.
Current India module capacity is 85 GW and cell capacity is 25 GW. Even at peak India will consume around 50 GW solar. Hence exports has to pick up to absorb additional capacity.
Key players in solar energy
| Company | Current – GW | 2030 – GW |
| Adani green | 10 | 50 |
| ReNew | 5.8 | 20 |
| NTPC | 6.3 | 60 |
| Tata power | 4 | 30 |
| Acme | 2.5 | 3.6 |
| Avaada | 4.4 | 30 |
| Greenko | 4.3 | 6.3 |
| KPI Green | 0.5 | 1 |
Economics of power industry
| Technology | CAPEX per MW (₹ Cr / MW) | Capacity Utilization Factor (CUF) | EBITDA Margin (approx.) | Revenue | EBITDA | ROCE | Payback |
| Coal (thermal) | ₹6–8 Cr / MW | 55–70% (falling due to renewables) | 20–30% (squeezed by coal & tariff costs) | 1650 | 450 | 6% | 17 |
| Gas (CCGT / OCGT) | ₹4–5 Cr / MW | 25–40% (low due to LNG/domestic gas supply issues) | 10–20% (volatile, often very low) | 850 | 130 | 3% | 35 |
| Nuclear | ₹15–20 Cr / MW | 75–85% | 25–35% (high once operational, but huge upfront costs & delays) | 2100 | 650 | 4% | 28 |
| Solar (utility-scale PV) | ₹3.5–4 Cr / MW | 18–23% (India avg.) | 75–85% (low opex, predictable returns) | 540 | 430 | 11% | 9 |
| Wind (onshore) | ₹5–6 Cr / MW | 25–35% (good sites in TN, Gujarat, Rajasthan) | 65–75% | 790 | 550 | 10% | 10 |
| Hydro | ₹8–12 Cr / MW | 30–45% (depends on hydrology) | 40–50% (lumpy due to seasonal flows & long gestation) | 1000 | 450 | 4% | 23 |
Solar and wind are the best in terms of power ROCE and also both of them are not fully available. Also, given that solar power target for government is 500 MW by 2030 from current 103 GW, solar will see manifold increase.
Given the higher ROCE of the business, there is more and more investment going in this area – following are the key advantages and challenges of it
- The cost of solar module will keep coming down due to over capacity (see below) which will improve the ROCE of the business
- There is huge capex being spent on sourcing and making locally, which will reduce dependency on China
Challenges
- The energy needs to be stored for intermittent supply
- The PPA prices are getting lower due to lack of complete cycle availability
- China is still a major player in the upstream components like polysilicon and ingots.
Key players – In Indian power business
| Rank | Company | Installed Capacity | 2030 Target Highlight |
| 1 | NTPC Ltd. | ~76 GW | 130 GW by 2032 (incl. 60 GW renewable) |
| 2 | Adani Power | ~12–15 GW | ~30.67 GW by 2030 (shift to nuclear) |
| 3 | Tata Power | ~14.7 GW | 20 GW renewable by 2030 (32 GW total) |
| 4 | NHPC | ~7.07 GW | +10.4 GW NE project + 20 GW pumped storage |
| 5 | Adani Green Energy | ~5.3 GW | 45 GW renewable by 2030 |
| 6 | JSW Energy | ~4.6 GW | 30 GW capacity + 40 GWh storage by 2030 |
| 7 | ReNew Power | ~10.6 GW | Not specified |
| 8 | SJVN | ~2.47 GW | Not specified |
| 9 | Torrent Power | ~3.88 GW | Not specified |
| 10 | Reliance Power | ~5.95 GW | Not specified |
All power producers are planning have capacity expansions in solar space and hence there is going to be high demand for the following:
- Solar panels/ infrastructure
- Energy storage systems
Also, solar power margins and ROCE are better – hence overall as the business mix for most companies move towards solar – margins and business mix will keep improving. As discussed before, key challenge for India is state political will to reduce T&D losses. However, for most of these companies – the PPAs are signed and hence their money as such isn’t dependent on it. However, health of state discoms decides the ability of them to honor the PPAs and hence ideally companies with higher mix with central government agencies, states with strong discoms will have a better runway. Also, companies which are directly supplying to captive users also have a better runway.
Another tiny advantage is owning both power plant and distribution – but as per experts – most times you need to end up giving it to grid and buying power from the grid. So the cost advantages though help in profitability does not impact the cost of power for distribution companies.
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