Combined generation from solar PV and wind was 20% higher year-on-year in the first half of 2025, accounting for nearly 14% of India’s power mix, up from 11% in the same period last year. Solar output rose 25% while wind generation grew slightly less than 30%.
Hydropower also made strong gains, with generation up 16% year-on-year, supported by improved water availability since mid-2024. Nuclear power output increased 14%, bolstered by the addition of the 700 MW Unit 7 at the Rajasthan Atomic Power Project (RAPP), which was connected to the northern grid in March. Its twin unit, RAPP-8, is scheduled to begin operations in FY 2025-26 as part of the government’s Nuclear Energy Mission, which targets 100 GW of nuclear capacity by 2047.
Despite multiple extensions of a government directive requiring imported coal-based plants to run at full capacity, coal-fired power output fell 3% in H1 2025—the first such drop in the first half of the year since 2020. Gas-fired generation saw a sharper decline of nearly 30%, returning to 2023 levels.
The IEA projects coal generation to rebound modestly in the second half of 2025, leading to 0.5% annual growth, followed by a 1.6% increase in 2026. Gas-based generation is forecast to decline 3% this year before rising 7% next year. Nuclear output is expected to climb 15% in 2025 and 19% in 2026, while renewable sources will continue their strong momentum. Solar PV is projected to expand 40% this year and 28% in 2026, with wind posting around 10% annual growth. Hydropower output is forecast to grow 7% in 2025 and 10% in 2026.
Electricity demand growth has moderated this year. After rising 6% in 2024, demand is forecast to increase by 4% in 2025, with a sharper uptick of 6.6% in 2026 as industrial and services sector activity strengthens and air conditioner usage expands. In H1 2025, demand was up just 1.4% year-on-year, partly due to subdued industrial activity and milder summer weather compared to 2024.
According to the Ministry of Power, Government of India, peak load could touch 270 GW this year, up 8% year-on-year, with the seasonal peak shifting to September. The government is also implementing air conditioner efficiency standards, which could cut peak demand by as much as 60 GW by 2035.
Meanwhile, electricity prices fell about 15% year-on-year in H1 2025, averaging USD 51 per MWh, though they remain above pre-2022 levels. Softer seaborne coal prices, improved renewable output, and additional thermal capacity helped ease costs and strengthen market liquidity.
Notably, a combination of robust renewable output and unseasonal rains drove hydropower generation higher, pushing spot market prices close to zero during several intervals on May 25.