India's power sector offers $500 billion investment opportunity as capacity addition hits 4-5 GW a month

[L to R]: Piyush Singh, Additional Secretary, Ministry of Power, Government of India; Pankaj Agarwal, Secretary, Ministry of Power, Government of India; Manohar Lal, Minister of Power and Housing & Urban Affairs, Government of India; Ghanshyam Prasad, chairman, Central Electricity Authority; Dr RK Tyagi, Power Grid Corporation of India CMD

• India adds 4–5 GW power capacity monthly, total now over 514 GW
• Investment opportunity in power sector exceeds $500 billion over next 7 years
• Electricity demand to double by 2040 due to growth and urbanisation

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India's power sector is adding 4-5 gigawatts (GW) of generation capacity every month and offers an investment opportunity of over $500 billion over the next seven years, Power Secretary Pankaj Aggarwal said on Thursday evening, highlighting the scale of capital required to meet the country's rapidly rising electricity demand.

"India's installed power generation capacity has crossed 514 GW, up from 509.74 GW in November 2025, reflecting the accelerated pace of additions led largely by renewable energy," Aggarwal said.

"Every month, we are adding about 4-5 GW of capacity. To sustain this momentum and meet future demand, very large investments will be required across generation, transmission and grid infrastructure," he said.

Speaking at the curtain-raiser event of the Bharat Electricity Summit in New Delhi, Union power minister Manohar Lal Khattar said the sector is emerging as one of the largest long-term investment opportunities as electricity demand rises alongside economic growth.

"We estimate an investment potential of over $345.97 billion in electricity generation and $68.22 billion in transmission and distribution. The energy storage sector alone offers an opportunity of $35.21 billion," Khattar said.

India's electricity demand is expected to double by 2040, driven by industrial expansion, urbanisation and rising household consumption. Total electricity generation has increased from 1,020 billion units in 2014 to 1,830 billion units in 2025, while per capita consumption has risen from 957 kilowatt-hours to 1,460 kilowatt-hours over the same period, according to data shared by the power ministry.

Aggarwal said India successfully managed a peak power demand of 250 GW in the summer of 2024, supported by a strong transmission backbone and one of the world’s largest synchronous grids.

"The inter-regional transfer capacity today stands at 120 gigawatts, enabling the entire country to operate on one grid and one frequency," he said, adding that India has developed nearly 5 lakh circuit kilometres of transmission lines and is close to crossing the milestone.

While India's non-fossil fuel capacity share has crossed 50 percent, Aggarwal said the emphasis has now shifted to scaling investments to ensure grid stability, reliability and affordability as renewable penetration increases.

“India is a high-growth power market with significant untapped potential,” he said, estimating total investment requirements at over half a trillion dollars over the next seven years.

The Bharat Electricity Summit, scheduled to be held in March 2026, is expected to bring together policymakers, utilities, global investors and technology providers to discuss financing needs, grid expansion, energy storage and the next phase of India’s power sector transition.