India’s Energy Demand Is Likely To Triple In 10 Years; Green Energy Shift To Require Rs 65 Trillion Investment

Given India's rising population, urbanisation, industrial expansion, and growing economic activities, the country's energy demand is likely to triple in ten years. To meet the growing energy demand, it would be important to boost the green energy transition which will require an estimated Rs 65 trillion of capital expenditure (Capex) investment, according to an Omniscience Capital report.

The electricity demand of the country is likely to triple by 2035 and may reach over 4,000 TWh. The boosting electricity demand would require a massive scale-up in generation capacity across renewables like solar and wind, thermal and nuclear. Additionally, it would be needed to ensure robust scale-up in generation cpacity across renewables.

Solar Energy Generation Will Be Key Focus In Coming Decade

While the significance will be to add around 850-900 GW of new Power capacity by 2035 and reach 1,300-1,400 GW in total. The energy transition will also require around Rs 65070 trillion investment in wired infrastructure and transmission grids and smart meters.

Out of all the green energy sources, solar energy generation will be of immense importance in the coming decade and would enhanced investment for capacity building. "Solar is likely to lead India's energy mix by 2035 with 564 GW capacity, growing 5x from 2025 and generating nearly 1,000 BU annually, requiring ~Rs 23 trillion in Capex," read Omniscience Capital report.

Other than solar energy, wind capacity will also expand at a significant rate of 5.5X to ~280 GW by 2035. The solar energy expansion would generate around ~600 BU and require Rs 11.5 trillion in capex. Coming to conventional sources of energy, coal capacity is likely to drop in the coming years but will still dominate the sector because of its significant contribution.

Coal's capacity projected to drop to 24% by 2035, but still generating 45% of power with ~1,900 BU output and requiring Rs 9 trillion investments, according to the report.

Creation of Transmission Superhighway

To meet the growing demand, it is important for the country to build a transmission superhighway which will include around 2.3 lakh circuit kilometers of new lines. The expansion will require an estimated Rs 13 trillion of investment. Special focus will be required in the setting up of smart meters for real-time monitoring and efficient distribution. The digital backbone of this energy revolution will be laid through 30 crore smart meters, requiring Rs 1.3 trillion. Coal energy distribution is likely to remain a key contributor in fulfilling India's power demand.

"India's Energy Transition to a 4-Trillion-units consumer by 2035 with a rapid transition towards renewables presents a massive INR 65 trillion investment opportunity in the infrastructure space. Our curated power-sector stocks universe of 200+ listed companies gives us ample flexibility to select growth opportunities at attractive valuations from a wide arena of companies that include renewables, transmission, EV, Battery storage and other ancillaries," said Ashwini Shami, President and Chief Portfolio Manager at OmniScience Capital.