India's power demand to grow 6% annually over next 4-5 years: Centrum report

India's renewable energy story is gathering pace, and so is its appetite for electricity.Over the next four to five years, power demand is expected to grow by around 6% annually, as the country continues to add 45-50 GW of renewable energy capacity every year, according to the Centrum Institutional Research Q1FY27 power sector results preview report.The brokerage said, "Power demand is expected to grow at 6% pa as we expect renewable capacity additions to continue in the range 45-50 GW per year over next 4-5 years."Even though the June quarter is typically a seasonally weaker period for renewable energy equipment manufacturers, the report expects renewable energy companies to deliver healthy quarterly performance. It also sees independent power producers (IPPs) maintaining the growth momentum witnessed over the past few quarters.India has already made a strong start to FY27, adding 6.8 GW of solar capacity and 712 MW of wind capacity during the first two months of the financial year. According to the report, these additions keep the country on track to achieve its annual renewable energy capacity addition target of 45-50 GW.The brokerage said domestic solar manufacturers continue to benefit from strong local demand and import substitution opportunities.

At the same time, renewable IPPs are expanding their operational portfolios through faster project commissioning and greater participation in hybrid renewable projects, Firm and Dispatchable Renewable Energy (FDRE) projects and energy storage.According to the report, the sector's long-term growth remains supported by several structural factors."Industry growth remains underpinned by India's target of achieving approx.

500 GW of non-fossil fuel capacity by 2030, rising power demand, favourable regulatory support, and increasing adoption of BESS solutions," it said.The report also highlighted the steady rise in electricity consumption, noting that the country's peak power demand reached 271 GW in May 2026, compared with 242 GW for FY26.Looking ahead, the brokerage retained a positive outlook on the sector, citing capacity expansion, backward integration and a growing project pipeline as key growth drivers.It added that "Rising corporate decarbonisation commitments, growing demand for RTC renewable power and rapid deployment of battery energy storage systems are further expected to accelerate investment and capacity addition momentum over the medium term."