Peak power demand may hit 300 GW next year, says power minister

New Delhi: India’s peak power demand is expected to touch 300 GW in FY27, up from an estimated 272 GW this year, prompting the government to ask utilities to prepare for a sharp rise in electricity consumption driven by data centres, artificial intelligence and electric vehicles.

Speaking at the 12th India Energy Storage Week (IESW) 2026 on Wednesday, power minister Manohar Lal said the country had already recorded a peak demand of about 271 GW this year, while available generation capacity has risen to 284 GW.

“India’s peak power demand is set to reach 300 gigawatts next year, driven by the rapid expansion of data centres, artificial intelligence, and electric vehicles. According to estimates, we have already reached 271 GW and projections suggest the peak may rise even further this year,” Lal said.

The minister said the expected increase in electricity consumption makes energy storage critical to ensuring power is available whenever and wherever it is needed.

That need is reflected in the latest India BESS Market Review, released on Wednesday, which estimates India will require 888 GWh of energy storage system (ESS) capacity, including battery energy storage systems and pumped storage projects, by 2035-36.

The report said installed battery energy storage system (BESS) capacity expanded more than eleven-fold in the first half of 2026 to 8.7 GWh, rising from 0.78 GWh in December 2025. It projects installed BESS capacity will exceed 10 GWh by the end of the year. During the first six months of 2026, India floated tenders for 47 GWh of ESS capacity, taking the overall tender pipeline to 260 GWh.

“By manufacturing within our borders, we reduce imports, lower costs over time, and secure our nation against global uncertainties. ‘Vocal for Local’ and ‘Make in India’ are crucial for our power sector, especially in solar cells, batteries, and containers,” Lal said.

Ghanshyam Prasad, chairperson of the Central Electricity Authority (CEA), said India is targeting about 160 GW of storage capacity by 2035, spanning both battery and pumped hydro storage.

“With robust infrastructure, strong private sector participation, and a renewed focus on domestic content and standardisation, we are laying the foundation for reliable, round-the-clock renewable energy. The stage is set; it’s time for the industry to deliver solutions for India’s clean energy future,” Prasad said.