India's electricity generation in 2024 grew at its slowest pace since the COVID-19 pandemic, reflecting a slowdown in the country's economy, which remains the fastest-growing major economy globally. Data from the federal grid regulator, Grid-India, revealed that power generation increased by 5.8% year-on-year to 1,824.13 billion kilowatt-hours (kWh).

Growth in power output averaged 2.3% in the second half of the year, significantly lower than the 9.6% increase recorded in the first half. This decline aligns with a broader economic slowdown, as India's economy grew at its slowest rate in nearly two years during the quarter ending September 30. December also saw the year's weakest manufacturing growth due to reduced demand.

Despite this, analysts predict a rebound in 2025, with electricity demand expected to grow between 6% and 7%, driven by increased industrial activity and heightened residential power use due to adverse weather. Sooraj Narayan, head of Asia-Pacific power modeling at consultancy Wood Mackenzie, noted that power demand began rising in December with colder weather boosting heating system usage.

The rise of renewable energy sources and reduced reliance on coal were notable trends in 2024. The share of coal in India's power generation fell to 74.4% from 75% in 2023, marking the first decline after three years of growth. Renewable energy sources reached a record 12.1% share, although the sector experienced slow growth. Solar power output rose by 18.4%, the slowest since India's 2015 climate commitments, while wind power generation declined for the first time since 2020.

Hydropower generation rebounded by 4% following a significant drop of 13.7% in 2023, yet its share in total output decreased to 8.6%. Meanwhile, natural gas-fired power generation increased by 17.3% in 2024 but is expected to decline in 2025 due to anticipated higher gas prices, according to Kesher Sumeet, a senior LNG analyst at Energy Aspects. Both coal and renewable energy are projected to expand their shares in India's energy mix in the coming year.

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