CEA Maps Rising Power Demand from Data Centres, Hydrogen; Plans Capacity Markets for Reliable Supply – EQ
In Short : The Central Electricity Authority (CEA) expects significant power demand growth from data centres, green hydrogen production, and emerging industries. To ensure reliable supply, capacity markets are being developed as a key mechanism. These steps aim to balance rising electricity needs with renewable energy integration, grid stability, and India’s broader clean energy and decarbonization goals.
In Detail : The Central Electricity Authority (CEA) has projected a sharp rise in India’s power demand, fueled by rapid growth in data centres, green hydrogen projects, and other energy-intensive industries. These sectors are set to reshape the country’s electricity consumption landscape in the coming years.
Data centres, in particular, are emerging as major power consumers due to the surge in digitalization, cloud computing, and artificial intelligence. Their round-the-clock operations require uninterrupted power, significantly adding to the country’s electricity demand profile.
Green hydrogen production is another factor driving demand. Electrolysers powered by renewable energy will need large amounts of electricity, creating new pressures on the grid while simultaneously supporting India’s clean energy transition.
To meet these future needs, the government is preparing to introduce capacity markets. These markets are designed to ensure that adequate power generation capacity is available to meet peak demand and avoid supply shortages.
Capacity markets will provide a framework for investment in both conventional and renewable energy projects. By assuring returns to developers, they aim to stimulate timely capacity addition and enhance reliability in the power system.
The CEA emphasized that balancing supply and demand is crucial as India accelerates renewable energy integration. With ambitious targets of 500 GW non-fossil capacity by 2030, managing variability in renewable generation remains a key challenge.
Energy storage solutions, flexible generation, and grid modernization are being prioritized to complement capacity markets. These measures will help stabilize supply during periods of low renewable output and ensure consistent availability of electricity.
The growing industrial and digital economy also underscores the importance of long-term planning. Proactive measures such as demand forecasting, infrastructure expansion, and efficient market mechanisms are critical for ensuring grid resilience.
