India Powers Up: Third Largest Global Player in Energy Growth

India has emerged as a major player on the global energy stage, boasting the third-largest growth in power generation capacity in the last five years, only behind China and the United States, according to the International Energy Agency (IEA).

The report cites a surge in electricity demand driven by expanding commercial and residential spaces, a rise in the use of air conditioners and household appliances, and increasing industrial requirements. To satisfy this demand, India has expanded power generation across all sources, with a notable emphasis on renewable energy.

The expansion has been fueled by a significant increase in investments in clean energy, especially solar photovoltaics (PV), which represented more than half of India's non-fossil energy investments over the last five years. In 2024, a staggering 83% of the country's power sector investment focused on clean energy initiatives. India also became the largest recipient of development finance institution funding for clean energy, receiving around USD 2.4 billion in specific project funding.

Foreign direct investment in India's power sector reached USD 5 billion in 2023, doubling since before the COVID-19 pandemic, as government policies now permit 100% FDI in most electricity and transmission segments. However, the report notes a decline in foreign portfolio investment over the past two years due to various economic challenges, but overall, India's focus on clean energy and power generation growth remains strong.

(With inputs from agencies.)