India Logged World’s 3rd-Highest Power Generation Growth, Finds IEA

The International Energy Agency (IEA) latest report showed that India has seen the third-largest growth in power generation capacity in the world after China and the United States (US) over the past five years. IEA report explained, “While growth in power generation has come from all sources, there has been a surge in investment in renewables, led by solar PV, which constitutes over half of total non-fossil investment over this period.”

While a large share of the investment in India’s power generation capacity and transmission networks is met by domestic sources, foreign direct investment (FDI) has been growing steadily, reaching USD 5 billion in 2023, nearly double the pre-pandemic levels. This is promoted in part by rules permitting 100% FDI across electricity generation sources (except nuclear) and transmission infrastructure.

However, foreign portfolio investment (i.e., investment into financial assets such as stocks) in energy has taken a hit in the past two years due to a range of macroeconomic and sectoral factors, even as the longer-term trend has been one of steady growth. India has been pushing through reforms to improve the attractiveness of renewable power generation investment, including innovative mechanisms to address payment risks. 

India is on track to achieve 50% energy capacity from Non-Fossil Fuel