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Renewable energy

India's Energy Landscape Shifts: Renewable Capacity Soars, Thermal Plants Scale Down

Strategic Insights

— 2 min read

India's energy landscape is witnessing a significant shift driven by a dip in power demand and a steady increase in renewable capacity. According to an HSBC report, the share of renewable energy in total power generation reached 17 percent in May 2025 and further to 19 percent in the first 10 days of June, up from 13 percent and 14 percent during the same periods last year. This surge in renewable energy has led to a decrease in power demand, with overall power demand and peak demand falling by 4 percent and 7 percent, respectively, in May. The "must-run" status of renewable energy sources forced thermal power plants to scale down generation, resulting in a decrease in the average Plant Load Factor (PLF) of thermal units to 65 percent in May, down from 72 percent in the same month last year.

Key Takeaways:

  • The share of renewable energy in total power generation rose to 17 percent in May 2025 and further to 19 percent in the first 10 days of June, up from 13 percent and 14 percent during the same periods last year.
  • The report attributes the decline in power demand to a high base and excessive rainfall, with May witnessing significantly above-average rainfall.
  • The average Plant Load Factor (PLF) of thermal units dropped to 65 percent in May, down from 72 percent in the same month last year.
  • The surplus of power led to an increase in coal stockpiles at power stations, reaching 61 million tonnes, sufficient for 21 days of demand, compared to 17 days a year ago.
  • Power prices during solar hours dropped to zero on May 25, while power deficits remained negligible throughout the month.
  • The Indian government is expanding its support for battery storage solutions, announcing a new tranche of Rs 54 billion in viability gap funding (VGF) to support 30 GWh of battery storage capacity.
  • The government subsidy for new battery systems is around USD 21 per kWh.
  • Of the proposed 30 GWh, 25 GWh will be allocated to state-level projects, and the remaining 5 GWh will be assigned to NTPC.

Statistics:

  • Renewable energy share in total power generation: 17% (May 2025) to 19% (first 10 days of June)
  • Power demand decrease: 4% (May) to 1% (first 10 days of June)
  • Peak demand decrease: 7% (May) to 1% (first 10 days of June)
  • Plant Load Factor (PLF) of thermal units: 65% (May), down from 72% (same month last year)
  • Coal stockpiles at power stations: 61 million tonnes (sufficient for 21 days of demand)
  • Government subsidy for new battery systems: USD 21 per kWh
  • Proposed battery storage capacity: 30 GWh (25 GWh for state-level projects, 5 GWh for NTPC)

Sources:

  • HSBC report (no date mentioned in the original text)
  • Published by HT Digital Content Services with permission from KNN (Knowledge & News Network)

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