Projections from the International Energy Agency (IEA) indicate that by 2026, India's electricity demand will outpace China's, boasting the world's fastest growth rate. Despite Prime Minister Narendra Modi's commitment to achieving net-zero emissions by 2070, the IEA's report, titled "Electricity 2024," underscores the dominance of coal in India's power sector, expected to meet 68 percent of the demand by 2026.

The report reveals a shift from coal's 74 percent contribution to total electricity generation in 2023. Renewable generation remained stable at 21 percent in 2023, with solar and wind gains offset by reduced hydropower output. The addition of 21 gigawatts (GW) of renewable energy capacity in 2023 marked progress, constituting nearly 44 percent of the total installed capacity in the third financial quarter.

India experienced a seven percent rise in electricity demand in 2023, driven by rapid economic growth and increased space cooling needs. Despite a slight dip from the 8.6 percent growth in 2022, the demand is expected to escalate by an annual average of 6.5 percent from 2024 to 2026.

With this trajectory, coal-fired power generation is anticipated to grow by 2.5 percent annually between 2024 and 2026, while renewable generation will exhibit a more robust annual growth rate of 13 percent.

The IEA estimates that India's electricity demand in the next three years could rival the United Kingdom's. Notably, approximately 85 percent of new electricity capacity is projected to come from emerging economies, with China and India taking the lead in south Asia.

Changing weather patterns in India adversely impacted hydroelectric power availability, leading to a significant 15 percent drop in hydropower generation in 2023. To address power supply concerns, the government mandated a blending of a minimum of six percent imported coal with domestic coal until March 2024.

In addition to wind and solar projects, India is focusing on large hydro and nuclear power initiatives. Over 11.5 GW of stalled hydro projects, initially awarded to private sector companies 15 years ago, were transferred to central public sector entities in August 2023. More than half of the global nuclear power plants in the pipeline from 2024 to 2026 are in China and India, with global nuclear generation expected to increase by almost 10 percent in 2026 compared to 2023.

The IEA notes a growing interest in small modular reactor (SMR) technology, acknowledging its modest development and deployment challenges. India, aiming to triple its nuclear capacity by 2032, commenced operations at its largest domestically built nuclear power plant in Gujarat in June 2023.

As of November 2023, 68 GW of nuclear capacity is under construction, 9 GW is planned, and 353 GW is proposed globally, with Asia anticipated to exceed North America's nuclear power growth by 2026. China's notable progress in nuclear power includes the commercial operation of its first fourth-generation reactor in December 2023, marking a significant milestone according to the IEA.