India ranks third globally in power generation growth: IEA report

New Delhi, June 19: India has recorded the third-largest increase in power generation capacity globally over the past five years, trailing only behind China and the United States, according to the latest report by the International Energy Agency (IEA).

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The report highlights India's rapidly growing electricity demand, driven by the expansion of residential and commercial infrastructure, increasing use of air conditioners and household appliances, and rising energy needs from industrial sectors. To meet this surge in demand, India has significantly expanded its power generation across all energy sources—with a strong emphasis on renewables.

A key highlight of the report is India’s accelerating shift toward clean energy. Solar photovoltaic (PV) projects have led the way, accounting for over half of all non-fossil energy investments in the country over the past five years. In 2024 alone, an impressive 83% of the country’s total power sector investment was directed toward clean energy initiatives.

India also emerged as the largest recipient of clean energy funding from development finance institutions (DFIs) in 2024, securing approximately USD 2.4 billion in project-specific investments aimed at expanding renewable energy capacity.

In addition, foreign direct investment (FDI) in India’s power sector has seen a robust rise, reaching USD 5 billion in 2023—almost double the pre-COVID-19 levels. This growth has been bolstered by favorable government policies that permit 100% FDI in electricity generation (excluding nuclear energy) and transmission infrastructure.

However, the IEA report also notes a dip in foreign portfolio investments (FPI) in India’s energy sector over the last two years. This decline is attributed to a combination of macroeconomic uncertainties and sector-specific challenges, though the long-term investment outlook remains positive.

Overall, the report underscores India’s growing role as a global leader in clean energy transition and highlights the country's strategic focus on building a sustainable power infrastructure.