AI Generated Summary
- India has emerged as a global powerhouse in electricity generation, securing the third spot worldwide in terms of capacity growth over the past five years, according to the latest report by the International Energy Agency (IEA).
- In a particularly strong indicator of this shift, a staggering 83% of all power sector investment in India in 2024 was directed toward clean energy initiatives.
- The report flagged a decline in foreign portfolio investment in the energy sector over the past two years.
India has emerged as a global powerhouse in electricity generation, securing the third spot worldwide in terms of capacity growth over the past five years, according to the latest report by the International Energy Agency (IEA). Only China and the United States outpaced India during this period.
The report credits the surge in India’s power generation capacity to its rapidly growing electricity demand, driven by expanding residential and commercial infrastructure, increased use of household appliances like air conditioners, and rising industrial activity.
To keep pace with this escalating demand, India has ramped up power production across both conventional and renewable energy sources. However, the most notable progress has come from the country’s ambitious push into clean energy.
A cornerstone of this transition has been the growth of solar photovoltaic (PV) installations. Solar PV projects accounted for over half of India’s non-fossil fuel energy investments over the past five years. In a particularly strong indicator of this shift, a staggering 83% of all power sector investment in India in 2024 was directed toward clean energy initiatives.
The IEA also reported that India became the top global recipient of development finance institution (DFI) funding for clean energy last year, securing approximately USD 2.4 billion in project-specific investments aimed at expanding renewable energy generation.
Foreign direct investment (FDI) in India’s power sector has also seen a robust increase, reaching USD 5 billion in 2023—nearly double the pre-pandemic levels. This growth is bolstered by government policies that allow 100% FDI in electricity generation (excluding nuclear) and transmission infrastructure.
However, the report flagged a decline in foreign portfolio investment in the energy sector over the past two years. While the IEA attributed this drop to a mix of global economic headwinds and domestic sector-specific issues, it maintained that long-term investment prospects in India’s energy market remain positive.
With rising electricity demand and a strong policy framework supporting renewables, India’s position as a key player in the global energy transition appears increasingly secure. The IEA’s findings underscore the country’s significant progress—and its pivotal role in shaping the future of clean energy on the world stage.
