India's electricity generation growth hits post-pandemic low in 2024 amid economic slowdown

Electricity output increased by 5.8 percent year-on-year to 1,824.13 billion kilowatt-hours (kWh), based on daily load despatch data from Grid-India.

Power generation growth slowed sharply in the year's second half, averaging 2.3 percent compared to a 9.6 percent rise in the first half.

This trend mirrored the broader economic slowdown, with India’s GDP expanding at its slowest rate in nearly two years during the quarter ending September 30.

Manufacturing activity in December grew at its weakest pace of the year due to reduced demand, indicating that the slowdown has not significantly abated.

However, analysts predict a rebound in 2025, driven by increased industrial activity and higher residential power consumption due to adverse weather conditions.

Experts expect the demand growth rate to be higher in 2025, according to the report.

A slower rise in electricity demand, coupled with renewables accounting for a record 12.1 percent of power generation, helped reduce coal’s share in India’s energy mix.

Coal’s contribution fell to 74.4 percent in 2024 from 75 percent in 2023, breaking a three-year streak of increases.

Despite this, renewable energy growth showed signs of stagnation.

Solar output rose 18.4 percent in 2024, marking its slowest expansion since India’s climate commitments in 2015, while annual wind power output declined for the first time since 2020.

Hydropower output, India’s second-largest electricity source after coal, rose by 4 percent, recovering from a 13.7 percent drop in 2023.

However, its share in total power generation fell to 8.6 percent.

For 2025, analysts foresee both coal and renewables increasing their share at the expense of natural gas-fired power, which grew 17.3 percent last year.