India’s power output surged 4% in August 2025, driven by industrial demand. India’s electricity generation rose 4% year-on-year in August 2025, reaching 161.24 billion kilowatt-hours (kWh), the fastest growth since March 2025, propelled by industrial demand, according to government data. This uptick, reported in New Delhi, reflects a rebound in manufacturing and post-monsoon economic activity.
Why Does It Matters for Investment?
India’s power sector is pivotal for economic growth, with industrial consumption accounting for nearly 50% of electricity demand. Sustained energy output supports South Asia’s largest economy, influencing regional energy policies and investment opportunities.
Industrial Boost Drives Power Demand
India’s power output growth in 2025 reached a five-month high, with August recording 161.24 billion kWh.. The Central Electricity Authority reported that industrial activity, particularly in manufacturing, drove nearly half of this demand. According to the Ministry of Power, peak power demand hit 250.1 gigawatts (GW) in fiscal year 2024–25, reflecting a 4.2% annual increase.
The surge follows a slower growth period, with electricity output rising only 1.5% in the first half of 2025, impacted by a milder summer and early monsoon. Analysts attribute the August rebound to increased factory output and post-monsoon economic recovery.
Coal-Fired Power Resurgence
Coal-fired generation, which accounts for 64.8% of India’s electricity output, rose for the first time in five months in August 2025, contributing significantly to the 4% growth. Coal stocks at thermal plants stood at 58.1 million tonnes by April 2025, a 15% increase from 2024, ensuring supply stability. This resurgence, however, raises concerns about carbon emissions, given India’s status as the world’s third-largest greenhouse gas emitter.
Renewable Energy Growth in India 2025
Renewable energy sources, including solar and wind, saw a 23% output increase in August 2025, reaching a record share of 17% of total generation. India added 25.4 GW of renewable capacity in 2025, with solar leading at 14.9 GW. The government’s push for 500 GW of non-fossil fuel capacity by 2030 remains on track, bolstered by investments in grid modernisation and energy storage.
Hydropower also contributed, with a 9% annual output rise, supported by robust monsoon rainfall. According to the Ministry of New and Renewable Energy, 15 GW of hydroelectric projects are under construction, set to boost capacity by 2031.
Economic and Environmental Implications
The industrial boost in India’s power consumption reflects a broader economic recovery, with manufacturing growth outpacing 2024’s 2.3% energy output rise. However, reliance on coal complicates India’s clean energy transition, despite achieving 50% non-fossil fuel capacity in July 2025, five years ahead of its Paris Agreement target. Analysts project a 6–7% rise in electricity demand in 2025, driven by industrial activity and seasonal heating needs.
Background
India’s power sector has seen rapid expansion, with installed capacity reaching 472.46 GW by April 2025. Renewables, including large hydropower, constitute 46.3% of this capacity. The country missed its 2022 target of 175 GW in renewable energy but has since accelerated additions, particularly in solar (107.94 GW) and wind (51.05 GW). Coal remains dominant, producing 74.4% of electricity in 2024, though its share dipped slightly from 2023.
Looking Ahead
India’s power output growth in 2025 underscores its economic momentum, but sustaining this trajectory requires addressing grid challenges and scaling renewable investments. With industrial demand driving electricity needs, the nation’s energy policies will shape its path toward the 2030 non-fossil fuel target.
Published in SouthAsianDesk, September 2nd, 2025
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