India's power sector could see Rs 40 trillion investment in a decade: MO
POWER & RENEWABLE ENERGY

India's power sector could see Rs 40 trillion investment in a decade: MO

The power sector in India presents significant investment opportunities estimated to exceed Rs 40 trillion over the next decade, according to a report by brokerage firm Motilal Oswal.

Out of this estimated Rs 40 trillion, Rs 34 trillion is projected to be allocated toward capital expenditure, with the remainder expected in optional investments. Generation, transmission, and smart metering are anticipated to account for 86%, 10%, and 4% of the total investments, respectively.

The report highlighted several factors driving this substantial investment, including the accelerated compound annual growth rate (CAGR) of power demand, the need to upgrade or replace aging infrastructure as the energy mix shifts, and the transition toward cleaner energy sources.

India, the report noted, is in a unique position where rapid growth in real GDP per capita, technological advancements, and increased electrification are strong underlying forces that could sustain higher power demand for years. The brokerage firm stated that, given India's strong GDP growth prospects and the rise of new demand drivers such as electric vehicles (EVs), data centres, and the electrification of energy demand, power consumption in the country could grow by more than 7% annually over the next decade, currently ranging between 8-9%.

By 2035, the report predicted that EVs and data centres would drive one-third of India’s power demand growth. While these sectors currently account for a negligible portion of the country's power demand, the brokerage estimated that by 2035, a significant share of growth could be attributed to them.

India's current primary energy and electricity consumption trends closely resemble China's patterns in the early 2000s. Motilal Oswal also suggested that power consumption in India is at a pivotal point, with an expected annual growth rate of 6.5-7% over the next decade. This growth is likely to compound at 7-7.5% over the next 10 years, compared to the 5% CAGR seen in the previous two decades.

The power sector in India presents significant investment opportunities estimated to exceed Rs 40 trillion over the next decade, according to a report by brokerage firm Motilal Oswal. Out of this estimated Rs 40 trillion, Rs 34 trillion is projected to be allocated toward capital expenditure, with the remainder expected in optional investments. Generation, transmission, and smart metering are anticipated to account for 86%, 10%, and 4% of the total investments, respectively. The report highlighted several factors driving this substantial investment, including the accelerated compound annual growth rate (CAGR) of power demand, the need to upgrade or replace aging infrastructure as the energy mix shifts, and the transition toward cleaner energy sources. India, the report noted, is in a unique position where rapid growth in real GDP per capita, technological advancements, and increased electrification are strong underlying forces that could sustain higher power demand for years. The brokerage firm stated that, given India's strong GDP growth prospects and the rise of new demand drivers such as electric vehicles (EVs), data centres, and the electrification of energy demand, power consumption in the country could grow by more than 7% annually over the next decade, currently ranging between 8-9%. By 2035, the report predicted that EVs and data centres would drive one-third of India’s power demand growth. While these sectors currently account for a negligible portion of the country's power demand, the brokerage estimated that by 2035, a significant share of growth could be attributed to them. India's current primary energy and electricity consumption trends closely resemble China's patterns in the early 2000s. Motilal Oswal also suggested that power consumption in India is at a pivotal point, with an expected annual growth rate of 6.5-7% over the next decade. This growth is likely to compound at 7-7.5% over the next 10 years, compared to the 5% CAGR seen in the previous two decades.

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