The year 2025 marked a landmark period for India’s power sector, with historic advancements in energy generation, transmission, and distribution. From meeting peak power demand of 242.49 GW to reducing energy shortages at the national level to a mere 0.03% in FY 2025-26, the sector demonstrated resilience and commitment to sustainable growth.

Significant strides in energy conservation, consumer empowerment, and infrastructure development underscore the government’s efforts to ensure reliable, affordable, and clean energy for all. With groundbreaking initiatives such as universal electrification, enhanced rural power availability, and the adoption of cutting-edge technologies, India is firmly on the path to becoming a global energy leader.

Improvement in Power Supply Position:

India successfully met the maximum power demand of 242.49 GW during FY 2025-26. Due to significant additions in generation and transmission capacities, energy shortages at the national level have reduced to a mere 0.03% in FY 2025-26, a major improvement from 4.2% in FY 2013-14.

Per capita electricity consumption in India has surged to 1460 kWh in 2024-25, marking a 52.6% increase (503 kWh) from 957 kWh in 2013-14.The average availability of electricity in rural areas has increased from 12.5 hours in 2014 to 22.6 hours, while urban areas now enjoy up to 23.4 hours of power supply as compared to 22.1 hours in 2014, reflecting substantial improvements in the reliability and reach of electricity services.

Generation:

Installed power generation capacity has surged by 104.4%, increasing from 249 GW as of March 31, 2014, to 509.743 GW as of November 30, 2025. Generation capacity addition during January-November 2025 was 55.57 GW.

Since April 2014, 178 GW of renewable energy capacity, including large hydro, has been added. This includes 130 GW of solar power, 33 GW of wind power, 3.4 GW of biomass, 1.35 GW of small hydro, and approximately 9.9 GW of large hydro generation capacity, demonstrating India’s strong commitment to clean energy.

To meet the projected electricity demand of India’s rapidly expanding economy, 13.32 GW of new coal- based thermal capacity has been awarded in FY 2025-26 (till 30.11.2025). Further, 7.21 GW capacity has been commissioned in FY 2025-26 (till 30.11.2025). The total installed capacity of coal and lignite-based thermal plants now stands at 226.23 GW. An additional 40.35 GW of capacity is under construction, with 7.03 GW expected to be commissioned in FY 2025-26. A further 24.02 GW of capacity is in various stages of planning, clearances and bidding.

Coal Stock Position: As of March, 2025, domestic coal-based (DCB) power plants held a coal stock of 55.48 MT. As of 21st December, 2025, these plants hold 51.7 MT of coal which is targeted to increase to 66 MT by March 2026. Sustained coal supply during Q1 and Q2 of FY 2026 ensured meeting the peak demand of 242.49 GW in June 2025. With improved domestic coal availability, the Ministry of Power discontinued its advisory for blending imported coal beyond October 15, 2024.

Revision of SHAKTI Policy: The Cabinet Committee on Economic Affairs approved the Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for coal allocation to power sector in May 2025, streamlining coal linkage mechanisms for the power sector. With the introduction of Revised SHAKTI Policy, existing eight Paras of the SHAKTI Policy, for coal allocation, have been mapped to only two Windows, in the spirit of ease of doing Business, enhancing coal accessibility, operational flexibility, and competition. It ensures optimal utilization of thermal capacity, promotes affordable power, reduces import dependency, and strengthens India’s energy security.

Transmission:

The Centre has finalised National Electricity Plan from 2023 to 2032 for central and state transmission systems to meet a peak demand of 458 GW by 2032. The total cost of the plan is Rs 9.16 lakh crore under the previous plan 2017-22, about 17,700 circuit kilometres (ckm) lines and 73 GVA transformation capacity were added annually. Under the new plan, transmission network in the country will be expanded from 4.98 lakh ckm in Nov’2025 to 6.48 lakh ckm in 2032. During the same period the transformation capacity will increase from 1,398 Giga Volt Ampere (GVA) to 2,345 GVA. Inter-Regional transfer capacity will increase from 120 GW to 168 GW. This plan covers the network of 220 kV and above. This plan will help in meeting the increasing electricity demand, facilitate RE integration and green hydrogen loads into the grid.

During 2025, 6,511 ckm of transmission lines (of 220 kV & above), 1,00,368 MVA of transformation capacity (of 220 kV & above) and 1600 MW of Inter-regional Transfer Capacity have been added.

Distribution:

Under the Revamped Distribution Sector Scheme (RDSS) which aimed at improving operational efficiencies and financial sustainability of Discoms, 19,79,30,131 prepaid smart meters, 52,52,692 DT meters and 2,05,475 feeder meters have been sanctioned at a cost of ₹1,30,671 crore. Loss reduction works of ₹ 1,52,854 crore have been sanctioned and ₹ 38,187 crore have been released under RDSS. As on 31.12.2025, 3.76 consumer meters, 12.56 DT meters and 1.58 feeder meters have been installed under RDSS. As a result of reform measures taken under the scheme. AT&C losses have come down to 16.16% (provisional) and ACS-ARR gap has reduced to Rs. 0.11/kWh (provisional) in FY2025 from 21.91% and Rs 0.69/kWh respectively in FY 2021.

Energy Conservation and Efficiency:

The Ministry of Power has notified the Carbon Credit Trading Scheme, empowering industries to reduce greenhouse gas emissions and earn carbon credits. This initiative fosters investments in transformative technologies, positioning India as a leader in global green finance. The landscape of CCTS broadly comprises of two mechanisms – a.) Compliance and b.) Offset.

Under the compliance mechanism, the obligated entities have to comply with the prescribed greenhouse emission intensity (GEI) targets by the Central Government. Further, the obligated entities who reduce their GHG emission intensity below their prescribed norms will be issued carbon credit certificates (CCCs) whereas those entities who could not meet their targeted GHG emission intensity can meet their shortfall by purchasing CCCs from Indian carbon market. The Greenhouse gas emission intensity (GEI) target notification for four sectors – Aluminium, Cement, Chlor-Alkali, and Pulp & Paper covering 282 obligated entities was notified by the Central Government in October 2025.

Reforms and Initiatives:

To promote payment discipline across the power sector value chain, which had long been a concern due to the mounting receivables of generating companies and other entities, Central Government notified the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on 3rd June 2022. Since their implementation, significant progress has been achieved – against legacy dues of Rs.1,39,947 crore as on 03.06.2022, 13 States/UTs have paid Rs.1,31,942 crore through 39 EMIs, prepayments, and reconciliations. Consequently, the outstanding legacy dues have reduced to Rs.8,005 crore, and DISCOMs are now largely paying their current dues on time, reflecting a marked improvement in sectoral financial discipline.

The Centre has revised the capital expenditure limit for schemes related to setting up hydro generating stations to ₹3,000 crore, requiring the concurrence of the CEA. Further, the Government has exempted off-stream closed-loop pumped storage schemes, irrespective of the quantum of capital expenditure, from the requirement of concurrence by the CEA. India has achieved its Nationally Determined Contribution (NDC) target of 50% cumulative non-fossil electric capacity nearly five years ahead of schedule. Non-fossil capacity share has risen from 32% in 2014 to 51% by October 2025, demonstrating India’s rapid transition towards clean energy and its commitment to global climate goals.