India’s Electricity Demand to Outpace Energy Growth by 2035
S&P Global report predicts India's electricity demand will surge, driven by data centres and green hydrogen, reaching 240 TWh by 2035.
India is witnessing a massive structural shift in its energy consumption patterns, with electricity demand projected to grow significantly faster than the country's overall energy needs over the next decade. According to a recent report by S&P Global, this "electrification" of the economy is set to transform the nation's power landscape by 2035.
The Great Electrification Shift
The transition toward an electricity-led economy is already gaining momentum. As India moves away from traditional fossil fuels, the share of electricity in the total energy basket is expected to climb from approximately 19% in 2025 to nearly 25% by 2035. This divergence is highlighted by the projected growth rates: while overall energy demand is expected to grow at 2.47%, electricity demand is forecasted to surge at a much higher rate of 5.56% between 2025 and 2035.
Several key factors are driving this rapid increase in power consumption:
- Electric Vehicles (EVs): The rising adoption of EVs is actively reducing the nation's reliance on fossil fuels.
- Industrial Evolution: Industries are increasingly pivoting toward electricity and green hydrogen-based production processes.
- Lifestyle Changes: Rising incomes, increased ownership of household appliances, and higher cooling requirements due to changing climates are boosting domestic demand.
- Urbanization: Rapid industrialization continues to pull more power into the national grid.
Data Centres and Green Hydrogen: The New Power Hungry Giants
Perhaps the most striking revelation in the S&P Global report is the role of emerging technologies. The demand from data centres and green hydrogen production is expected to explode. Their combined electricity consumption is projected to rise nearly ninefold, reaching approximately 240 terawatt-hours (TWh) by 2035.
As the digital economy expands, the massive energy requirements of data infrastructure will become a cornerstone of India's power needs, alongside the burgeoning green hydrogen sector which aims to decarbonize heavy industry.
Infrastructure Challenges and Distributed Generation
This surge in demand brings significant pressure to India's power infrastructure. The report warns that meeting this growing and increasingly unpredictable demand will require a multi-pronged approach, including:
- A highly diversified supply mix.
- Strengthened transmission and distribution networks.
- Enhanced energy storage capabilities.
- Flexible generation and market designs to support a dynamic system.
While the central electricity grid will remain the primary provider, there is a noticeable shift toward distributed generation—producing electricity closer to the end consumer. This segment is expected to grow from a 13% share in 2025 to roughly 16% by 2035.
Leading the Way in Renewable Energy
On the sustainability front, India has demonstrated remarkable speed. The country has already achieved its 2030 Nationally Determined Contribution (NDC) target, which aimed for 50 per cent cumulative installed power capacity from non-fossil fuel sources, ahead of the scheduled timeline. Looking ahead, the target for 2035 has been raised to 60 per cent. However, the report cautions that achieving these early capacity milestones fundamentally changes the nature of the energy challenge moving forward.