India’s power sector posted one of its strongest quarters of renewable energy expansion in the first quarter of financial year 2025-26 (FY26) even as the government raised its long-term thermal capacity targets, underscoring the dual track of growth and decarbonisation in the country’s electricity mix.
According to PowerPulse, which tracks key developments in India’s power sector, 1Q FY2026 by the Institute for Energy Economics and Financial Analysis (IEEFA), listed power companies together added 4.6 gigawatts (GW) of renewable capacity and 1.9 GW of thermal capacity during the quarter, with NTPC, Adani Green Energy, and JSW Energy leading the charge.
NTPC commissioned 2,716 MW in its best-ever quarter, taking its renewable portfolio to nearly 12 GW. Adani Green added 1.6 GW, pushing its operating base to 15.8 GW, a 45 per cent year-on-year increase. JSW Energy’s capacity rose by 1.9 GW, supported by the acquisition of O2 Power. NHPC and SJVN expanded their hydro and solar portfolios, while Suzlon recorded its highest first-quarter execution in 30 years at 444 MW, taking its wind order book beyond 5.7 GW.
Tata Power and ReNew Energy advanced domestic manufacturing, producing over 1.8 GW of solar modules and cells in the quarter. Tata Power also installed 45,500 rooftop systems, reflecting rising distributed demand.
On the financial front, banking and finance companies continued to dominate. The State Bank of India (SBI) reported net income of Rs 216.3 billion, followed by Power Finance Corporation (Rs 89.8 billion) and Coal India (Rs 87.3 billion). Among power generators, NTPC earned Rs 61.1 billion, while Adani Power posted Rs 33.1 billion.
JSW Energy and ReNew Energy saw sharp revenue growth—79 per cent and 70 per cent year-on-year respectively—while Sterling & Wilson’s revenues almost doubled. In contrast, Borosil Renewables slipped into a loss after its German arm filed for insolvency amid a European demand slump.
The quarter highlighted India’s balancing act between renewables growth and energy security. Peak demand touched a record 242 GW in June 2025, prompting the Union Ministry of Power to mandate imported coal plants to run at full capacity and bring gas-fired plants online.
In parallel, the government raised its 2032 thermal expansion target to 95 GW, up from 80 GW earlier, even as it launched new support schemes for clean energy integration. The Viability Gap Funding scheme will back 30 GWh of battery storage projects across 15 states, while pumped hydro ambitions have been scaled to 50 GW within six years.
On the market side, regulators approved electricity futures trading on MCX and NSE, recognised Virtual PPAs, and announced market coupling in the Day-Ahead Market from January 2026.
Transmission companies remained in expansion mode. Adani Energy Solutions secured new projects, taking its under-construction order book to Rs 593 billion, while PowerGrid ramped up capex to Rs 69.8 billion. India Grid Trust added 300 MW of solar and 276 circuit km of transmission, alongside its first major battery storage win.
Financial institutions deepened their role in powering India’s transition. IREDA expanded its loan book by 26 per cent year-on-year, with Rs 20 billion lent to renewables in the quarter. PFC’s loan book reached Rs 5.5 trillion, while SBI continued to scale green deposits.
Companies also sharpened their ESG disclosures. ReNew cut Scope 1 and 2 emissions by 18 per cent in FY2025, beating targets. NTPC expanded biomass co-firing and launched a green hydrogen hub in Andhra Pradesh. Tata Power reported that 44 per cent of its portfolio is now clean energy, while Adani Energy Solutions aims for 70 per cent renewable share by 2030.
Sector analysts said the dual trend of aggressive renewable expansion and continued reliance on coal reflects both ambition and pragmatism. “India is investing heavily in clean energy capacity and grid stability, but demand security means coal remains a safety net,” said Shantanu Srivastava of IEEFA.
With electricity demand projected to double by 2032 and installed capacity expected to cross 1,000 GW, the quarter underscores the scale of investment needed—estimated at more than US$500 billion across generation, transmission, and storage.