India is the third-largest producer and consumer of electricity after China and the United States, with about 6-7% share of global electricity generation. The country generated 2059.3 TWh in FY 2024-25, of which 23% came from non-fossil sources.

Electricity in India is generated by both public and private sector utilities, transmitted through a unified national grid, and distributed primarily by state-owned distribution companies (DISCOMs).

The sector has undergone significant reforms since the Electricity Act of 2003, which introduced competition, open access, and independent regulation. Despite rapid growth in generation and transmission capacity, the distribution segment continues to face financial stress due to high technical and commercial losses.

The sector emitted 1234.2 million tonnes of CO2 in FY 2024-25. As part of its commitment to achieve net-zero emissions by 2070, India plans to install 500 GW of non-fossil fuel capacity by 2030 and 60% non-fossil capacity by 2035.

History Electricity was first introduced in India during British rule in 1879 with the demonstration of electric light in Kolkata, followed by the country's first hydroelectric power station at Darjeeling in 1897 and first coal power plant at Kolkata in 1899. Electricity supply was largely developed by private companies serving urban centers and industries.

In 1902, British India had the most powerful transmission line of that time, a 92 miles long 30 kV connection from Shivanasamudram hydroelectric plant to the Kolar Gold Fields.Shivanasamudra: when India outpaced Niagara

After independence in 1947, the Electricity (Supply) Act of 1948 established the Central Electricity Authority (CEA) for planning at central level and State Electricity Boards (SEBs) at state level. SEBs oversaw generation, transmission, and distribution within each state. The sector expanded rapidly through successive Five-Year Plans, with coal and large hydroelectric projects forming the backbone of India's power system.

However, not every state was rich in coal or hydro resources. This led them to depend on diesel generators. In 1960s, regional grid was conceptualized to supplement power from neighboring states.

By the 1970s, REC was established to finance rural electrification. Generation was not able to keep up with growing demand. This, along with the oil price shocks led the central government to nationalize coal mines and establish CIL, NTPC and NHPC.

In the 1980s, MNRE was established to explore non-conventional energy sources. Rural electrification accelerated. However, due to votebank politics by state governments, tariffs were kept low which strained their finances. In order to further develop the sector, PFC was established for financing needs.

By the 1990s, the idea of a national grid was conceptualized and led to the establishment of PGCIL. The 1991 economic liberalization led to policy reforms. It allowed private participation in generation (via licenses) and the Electricity Regulatory Commissions Act, 1998 created independent regulators at central (CERC) and state level (SERC).

In the 2000s, the Electricity Act, 2003 consolidated prior legislation, mandated the unbundling of SEBs. Generation and distribution was de-licensed to encourage competition, and open access was introduced in transmission.

In the 2010s, all the five regional grids were fully synchronized to form a single national grid. Large-scale electrification programmes such as DDUGJY and Saubhagya extended electricity access to nearly all households. India also pursued renewable energy deployment goals.

In the 2020s, the nation achieved 100% household electrification, opened nuclear power to private sector, while continuing to expand its generation capacity, with renewables making up about 87% of total additions between FY 2020-21 and FY 2025-26.

Generation

India is the third-largest producer of electricity in the world. The country's utilities and captive plants generated 2059.3 TWh in FY 2024-25, with non fossil sources accounting for 23%.

In June 2025, India achieved 50% of its total installed electricity capacity from non-fossil fuel sources, five years ahead of its 2030 Paris Agreement commitment, with total installed capacity further crossing 500 GW in September 2025 — reaching 513.73 GW by December 2025, of which 51.93% was from non-fossil sources.

Below tables compiles installed capacity and generation data for recent years. Note:

Coal includes lignite. Hydro includes both large and small hydro. Bio includes biomass, bagasse, and waste to energy.

+Cumulative installed capacity (GW) Financial year UtilityCaptive Coal Diesel Gas Nuclear Hydro Bio Wind Solar Total Coal Diesel Gas Hydro Bio Wind SolarTotal 2021-22210.70.524.96.851.510.740.454399.545.3  18.75.70.13.23.876.7 2022-23211.90.624.86.851.810.842.666.8416.146.818.16.40.10.13.53.578.4 2023-24 217.6 0.6 25 8.2 51.9 10.9 45.9 81.8 442.046.119.66.20.10.23.74.580.9 2024-25 221.8 0.6 24.5 8.2 52.8 11.6 50 105.6 475.246.519.76.30.19.181.7 2025-26 228.6 0.6 20.1 8.8 56.6 11.7 56.1 150.3 532.7 +Gross Generation (TWh)Financial YearUtilityCaptive Coal Diesel Gas Nuclear Hydro Bio Wind Solar Total Coal Diesel Gas Hydro Bio Wind SolarTotal 2021-22 1078.6 0.2 36.0 47.1 162.1 18.368.6 73.4 1484.5179.22.120.80.44.02.8 209.3 2022-23 1182.1 0.4 23.9 45.9 173.3 18.671.8 102.0 1617.9179.82.021.10.30.24.83.7211.9 2023-24 1294.9 0.4 31.3 47.9 143.517.0 83.4 116.0 1734.3183.110.221.70.30.34.83.6223.9 2024-25 1331.6 0.4 31.3 56.6 160.215.9 83.3 144.2 1824.2186.912.023.00.412.8235.1 2025-26 1280.7 0.4 26.0 55.2 179.217.1106.7 174.8 1840.1

Sources

Fossil fuels

India has huge coal reserves, about an estimated 400.7 billion tonnes as of Apr, 2025 and as such it contributes a major share in electricity generation (typically 73%). The sector consumed 906.1 million tonnes of coal in FY 2025-26. Coal would remain a major source of generation in future, with likely peaking between 2030-2035.

Diesel-based generation plays a negligible role, used mainly for captive or emergency power. Utilization of gas plants has been limited due to low domestic availability and high prices of imported LNG.

Nuclear power

India has modest uranium reserves, about 325,000 tonnes, but has the largest thorium reserves in the world, around 457,000 - 508,000 tonnes. In order to leverage thorium's potential, the country's nuclear power programme is based on a three-stage strategy where it plans on building up a larger fissile inventory by:

Using natural uranium (0.7% U-235) in PHWRs and 3-5% enriched uranium in LWRs to make Pu-239 Using Pu-239 to irradiate thorium (Th-232) into U-233 via Fast Breeder Reactors

It would then deploy thorium-based reactors operating on a self-sustaining uranium-233 fuel cycle.

The nation's fleet is operated by the state-owned NPCIL. The installed capacity is projected to reach 22.48 GW by 2031–32, and is aiming to develop at least five indigenously designed and operational SMRs by 2033. India opened the sector to private ownership in Dec 2025, with a vision of expanding installed capacity to 100 GW by 2047.

Renewable energy Solar is the fastest-growing segment of the sector. India has about 3343 GWp of solar PV potential. Development started in 2010s through bundling, Viability Gap Funding, until global prices of solar PV collapsed steeply. As on March 2026, large parks (ground-mounted) make up about 76% of installed solar capacity. India has very limited domestic production of energy-intensive polysilicon and ingots / wafers, so, it assembles Chinese-imported solar cells to make modules / panels. As on March 2026, domestic manufacturing capacity of solar cell and module is around 27 GW and 172 GW respectively. In order to indigenise its supply chain, India has mandated use of domestic cells for all solar projects from Jan 2027.

Wind power generation began in 1990s. With an estimated potential of 1164 GW at 150m above ground, the segment has transitioned from early feed-in tariff mechanism to competitive bidding after 2017. This drove down tariffs, but also reduced project profitability, slowing down further capacity additions. As on March 2026, India has 24 GW of turbine manufacturing capacity with 70-80% indigenisation across components.

Hydropower is India's oldest sources of large-scale electricity generation. With 133.4 GW of potential (for >25 MW plants), 47% is concentrated in the Brahmaputra basin alone. Almost, all of which remains untapped due to difficult terrain, geological risks, environmental concerns, and high project costs. In recent years, the role of hydropower has expanded beyond electricity generation, with pumped-storage projects being promoted to provide energy storage and grid balancing support as solar and wind capacity increases.

Other renewable sources make up a small share (~6%) of total renewable generation. Small hydro harnesses the energy of rivers and canals, particularly in hilly and remote regions. Estimated potential is around 21.1 GW, with only 5.1 GW installed, as of March 2026. 1.5 GW of capacity is further planned between FY 2026-27 to FY 2030-31. Bagasse based co-generation in sugar mills export surplus captive power to the grid. India has mandated 5% agro residue based biomass pellets for co-generation with coal plants, by weight, from FY 2024-25. Waste-to-energy plants utilize municipal solid waste, sewage, and other biodegradable wastes.

Storage Energy storage systems (ESS) help in maintaining grid stability from intermittent and variable renewable energy sources and enabling round-the-clock supply of low-carbon electricity. Pumped-Storage Hydropower (PSH) and Battery ESS (BESS) are the most widespread and commercially viable means of energy storage.

India has identified a potential PSH of 290.4 GW and has an installed capacity of 7.2 GW as of FY 2025-26. It plans to install 100 GW by FY 2035-36. In 2020, power tariff from Solar PV clubbed with PSH fell below the coal plant tariffs in offering base load and peak load power supply.

India has 0.5 GW / 1.1 GWh of installed BESS as of FY 2025-26. The government is supporting development of 43.8 GWh of BESS through Viability Gap Funding.

There has been renewed interest in solar thermal because of its energy storage properties. As of 2025, India has an installed capacity of just 329.5 MW of solar thermal, out of which only 101 MW was operational. Other storage technologies like Flywheel Energy Storage, Compressed Air Storage, Green Hydrogen, etc. are in nascent stages of development.

Transmission and distribution

India has one of the world's largest interconnected electricity transmission and distribution (T&D) systems. The transmission network facilitates long-distance bulk power transfer, typically using 400kV, 765 kV AC and ±500 kV, ±800 kV HVDC to minimize resistive losses. The national grid, which was synchronized in 2013, consists of:

Inter-State Transmission System (ISTS): Largely managed by Central Transmission Utility (wholly owned by PowerGrid), with private participation through Tariff Based Competitive Bidding route, with a few exceptions. Intra-state Transmission System (Intra-STS): Managed by State Transmission Utility of each state. Projects are developed by State Government through competitive bidding process for projects costing above a threshold limit which are decided by the SERCs.

Voltages are progressively reduced to 220kV, 132kV, 66kV, 33kV, 11kV, 6.6kV for distribution. The segment is managed by state-owned DISCOMs, which are facing:

High aggregate technical and commercial (AT&C) losses, and A gap between average cost of supply (ACS) and average revenue realized (ARR)

As such, distribution remains the most financially stressed part of the sector.

The Government launched several initiatives to improve the operational efficiency and financial health of DISCOMs: