India's Peak Power Demand May Touch 446 GW By FY35: Minister

India is on track to face a record power demand of 270 gigawatts (GW) later this year, with peak requirements expected to soar to 446 GW by 2034–35, said Union Power Minister Manohar Lal. The projection underscores the need for urgent planning and coordination across federal and state levels to ensure a reliable and sustainable electricity supply.

Speaking at a regional conference for Eastern States and Union Territories in Patna, Lal said India had already met peak demands of 250 GW in May 2024 and 242 GW so far in 2025.

Distribution Sector Faces Pressure

Despite capacity growth, the Minister warned that the distribution sector remains the weakest link, requiring investments of up to ₹42 lakh crore by 2032. He cited persisting issues such as non-cost-reflective tariffs, low billing efficiency, and delayed government payments.

Lal urged states to reduce aggregate technical and commercial (AT&C) losses and address the gap between the Average Cost of Supply (ACS) and Average Revenue Realised (ARR). Utilities' inefficiencies, he said, drive up consumer tariffs and compromise service quality.

Smart Metering Push by 2025

Emphasizing digital transformation, the Minister called for the accelerated rollout of smart meters under the RDSS scheme. He urged states to ensure 100% prepaid smart metering in government buildings and colonies by August 2025, and in commercial, industrial and high-load segments by November 2025.

Lal said smart meters, enhanced by AI/ML-driven analytics, would improve transparency, billing, and payment compliance, especially for government consumers.

Transmission, Cybersecurity, and Capacity Plans

To meet rising demand, the Minister stressed the need for resource adequacy planning through FY2035 and expansion of inter- and intra-state transmission capacity. He recommended a mix of Tariff-Based Competitive Bidding (TBCB), Regulated Tariff Mechanism (RTM), budgetary support, and asset monetization for infrastructure development.

He also highlighted the importance of cybersecurity measures and power islanding schemes to protect critical transmission and distribution assets.

Key Policy Directions and Budget Support

Lal urged states to resolve Right of Way (RoW) constraints and explore alternative financing, including multilateral funding and public listings of transmission utilities. He called for diversification of generation, including at least one nuclear project per state, and stronger enforcement of Renewable Purchase Obligation (RPO) targets.

The Minister pointed to a ₹1.5 lakh crore allocation of 50-year interest-free loans in the Union Budget 2025–26, intended to support capital expenditure, including grid development.

Minister of State for Power and Renewable Energy also pressed for the timely completion of PM-KUSUM projects by December 2025, and rapid deployment of the PM Surya Ghar Muft Bijli Yojana to scale up rooftop solar adoption.