GLOBAL ECONOMIC OUTLOOK
GLOBAL GROWTH PROSPECTS (2024 2032)
The world economy is expected to expand at a moderate pace through 2032, with growth in the mid-3% range annually. The IMF projects global GDP growth at 3.3% in 2025 and 2026, which is below the 2000 2019 historical average of 3.7%. (imf.org)
IMF projects 3.3% global GDP growth in 2025-2026
Emerging markets continue to grow faster than advanced economies on average. Developing economies are forecast to expand at about 3.6% annually, over twice the rate of advanced nations (~1.7% annually) through the 2020s. Robust growth in Asia and parts of Africa is offsetting slower expansion in Europe, Japan, and North America. As a result, global GDP is on track to nearly double from 2015 levels by 2040 (cdn.gihub.org), driven disproportionately by emerging market activity.
Global growth is expected to remain stable, albeit lacklustre. At 3.3% in both 2025 and 2026, the forecasts for growth are below the historical (2000 19) average of 3.7% and broadly unchanged from October. The overall picture, however, hides divergent paths across economies and a precarious global growth pro le. Among advanced economies, growth forecast revisions go in different directions. In the United States, underlying demand remains robust, reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions. Growth is projected to be at 2.7% in 2025. This is 0.5% point higher than the October forecast, in part reflecting carryover from 2024 as well as robust labor markets and accelerating investment, among other signs of strength. Growth is expected to taper to potential in 2026.
In the area, growth is expected to pick up but at a more gradual pace than anticipated in October, with geopolitical tensions continuing to weigh on sentiment. Weaker-than-expected momentum at the end of 2024, especially in manufacturing, and heightened political and policy uncertainty explain a downward revision of 0.2% point to 1.0% percent in 2025. In 2026, growth is set to rise to 1.4%, helped by stronger domestic demand, as financial conditions loosen, confidence improves, and uncertainty recedes somewhat.
In other advanced economies, two offsetting forces keep growth forecasts relatively stable. On the one hand, recovering real incomes are expected to support the cyclical recovery in consumption. On the other hand, trade headwinds including the sharp up stick in trade policy uncertainty are expected to keep investment subdued.
In emerging market and developing economies, growth performance in 2025 and 2026 is expected to broadly match that in 2024. With respect to the projection in October, growth in 2025 for China is marginally revised upward by 0.1% point to 4.6%. This revision reflects carryover from 2024 and the fiscal package announced in November largely offsetting the negative effect on investment from heightened trade policy uncertainty and property market drag. In 2026, growth is projected mostly to remain stable at 4.5%, as the effects of trade policy uncertainty dissipate and the retirement age increase slows down the decline in the labor supply. In India, growth is projected to be solid at 6.5% in 2025 and 2026, as projected in October and in line with potential.
Indias growth is projected at 6.5% in 2025-2026
In the Middle East and Central Asia, growth is projected to pick up, but less than expected in October 2024. This mainly reflects a 1.3% point downward revision to 2025 growth in Saudi Arabia, mostly driven by the extension of OPEC+ production cuts. In Latin America and the Caribbean, overall growth is projected to accelerate slightly in 2025 to 2.5%, despite an expected slowdown in the largest economies of the region growth in sub-Saharan Africa is expected to pick up in 2025.
Global financial conditions remain largely accommodative, again with some differentiation across jurisdictions. Equities in advanced economies have rallied on expectations of more business friendly policies in the United States. In emerging market and developing economies, equity valuations have been more subdued, and a broad-based strengthening of the US dollar, driven primarily by expectations of new tariffs and higher interest rates in the United States, has kept financial conditions tighter.
INFRASTRUCTURE SPENDING AND INVESTMENT TRENDS
Infrastructure development is poised to be a key driver of economic growth worldwide over the coming years. Many countries have announced ambitious infrastructure programs to modernize transport, energy, and digital networks, which in turn spur demand for industrial goods and services. Global infrastructure investment needs are enormous, with one G20-backed study estimating about $94 trillion required by 2040 to keep pace with economic and demographic changes. This equates to roughly $3.7 trillion per year of infrastructure spending comparable to the annual GDP of Germany. Additional investments (around $236 billion per year) are needed up to 2030 to meet the UN Sustainable Development Goals for universal access to electricity and clean water. Developed economies are upgrading aging assets (e.g. replacing old power grids, bridges, and water systems), while emerging markets are building new capacity to support urbanization and industrialization. (Gihub.org)
$94 trillion required globally for infrastructure development by 2040
Energy and power infrastructure form a large share of these investments. For instance, expanding electricity networks to integrate renewable energy and provide reliable power supply is a priority across continents. The Global Infrastructure Outlook reports that Asia has the greatest infrastructure investment need (led by China, India, and Japan), accounting for about 50% of projected global requirements through 2040. Regions such as North America and Europe also face sizable investment gaps, particularly in transport and power grids, although to a lesser extent (the U.S. is assessed to require about $3.8 trillion infrastructure spending by 2040). Many governments are responding with funding initiatives: for example, the United States enacted a $1.2 trillion Infrastructure Investment and Jobs Act focusing on roads, bridges, and energy systems, and the European Union launched the “Next Generation EU” recovery fund with a significant green and digital infrastructure component. Emerging economies are leveraging public-private partnerships and multilateral development bank support to finance new highways, railways, ports, and electricity networks. These infrastructure outlays are a positive tailwind for industrial manufacturers, as they translate into strong demand for construction equipment, electrical machinery, and materials. Sectors like steel, cement, and power equipment (including transformers) directly benefit from sustained infrastructure development.
INFLATION OUTLOOK AND IMPACT ON
INDUSTRIAL MANUFACTURING
After a spike in global inflation in 2021 2022, the outlook is for gradual normalization over the next few years. Major economies experienced their highest inflation in decades due to pandemic-era supply chain disruptions, commodity price surges, and strong post-lockdown demand. By late 2023, price pressures had begun easing, and this disinflation trend is expected to carry forward. The IMF forecasts that global headline inflation will fall to 4.2% in 2025 and 3.5% in 2026, nearing central bank targets in many regions. Advanced economies are projected to see inflation retreat to around 2% 3% by 2025, while emerging markets may see somewhat higher rates (in the mid-single digits) before converging later. This improved inflation outlook reflects tightening monetary policies worldwide(imf.org)
IMF forecasts global headline inflation at 4.2% in 2025 and 3.5% in 2026
OVERVIEW
The World Energy Outlook 2024 (WEO 2024) is the International Energy Agencys flagship annual report analyzing global energy trends, projections, and scenarios .It examines the full spectrum of energy sources and uses from fossil fuels to renewables and their implications for energy security, affordability, and sustainability. Published against a backdrop of geopolitical conflicts and a receding global energy crisis, WEO 2024 emphasizes the evolving concept of energy security beyond oil and gas supply disruptions, extending to electricity reliability, supply chain resiliency for clean technologies, and threats from extreme weather. The reports purpose is to inform policymakers and stakeholders about where current policies are leading the energy system and what choices can steer it toward safer and more sustainable outcomes. It explores multiple scenarios, including the Stated Policies Scenario (STEPS), Announced Pledges Scenario (APS), and a Net Zero Emissions by 2050 scenario (NZE),to illustrate possible futures depending on policy ambition In essence, WEO 2024 provides a strategic overview of the global energy landscape through 2030 and beyond, highlighting critical trends in energy demand, supply, and emissions, and offering guidance on how to navigate the worlds energy transition.
KEY FINDINGS
WEO 2024 nds that clean energy deployment is surging and is on track to satisfy virtually all the growth in global energy demand this decade, which in turn means that demand for fossil fuels is nearing an inflection point. Under todays stated policies (STEPS), rising investment in renewables and efficiency is sufficient to meet almost all new energy consumption needs, causing global demand for each of the fossil fuels coal, oil and natural gas to peak before 2030.This marks a historic shift: continued economic growth no longer requires increased fossil fuel use by the end of this decade. Nonetheless, current policies are not enough to deliver a swift decline in emissions afterward in STEPS fossil fuel use plateaus but does not fall rapidly without additional measures Another key finding that the worlds energy system is becoming increasingly electrified. Electricity demand is growing at roughly double the pace of total energy demand, driven by expanding uses such as cooling, electric vehicles, and digitalization. WEO 2024 highlights that global power demand is “soaring,” with the equivalent of adding Japans entire electricity consumption each year to 2030.This means clean electricity is set to play a dominant role in future energy supply. Encouragingly, renewables lead the expansion in power generation, and their growth is now rapid enough to cover, in aggregate, all worldwide increases in electricity demand. Solar photovoltaic (PV) capacity additions have quadrupled in the past ve years, and annual solar manufacturing capacity worldwide is approaching 1,100 GW enough to potentially allow deployment almost three times higher than what was installed in 2023.This boom in clean energy is underpinning a new electrified energy economy.
However, the Outlook also flags regional disparities and areas where progress is lagging. Clean energy investment remains heavily concentrated; only about 15% of global clean energy investment occurs in emerging and developing economies (excluding China),even though these countries account for two-thirds of the worlds population. Energy access is another concern: despite improvements, hundreds of millions of people (especially in Africa) still lack electricity or clean cooking, and current trajectories fall short of achieving universal access by 2030. Meanwhile, energy-related carbon dioxide emissions are expected to peak by 2025 in the STEPS and then plateau, rather than decline sharply. How governments and consumers act this decade will determine whether emissions out or begin a meaningful downward path a pivotal factor for global climate goals.
In summary, WEO 2024s key insights are that the global energy transition has gained impressive momentum strong enough to bend the curve of fossil fuel demand and significantly scale up low-carbon solutions yet not yet fast enough to achieve climate targets. The world is on the cusp of a new era defined by clean electricity growth and peak fossil fuel consumption, but further action is required to ensure emissions go into sustained decline and that benefits are shared universally.
ELECTRICITYSUPPLYAND DEMAND TRENDS
A central theme of WEO 2024 is the rapid electrification of the energy system. Electricity demand is set to grow dramatically in the coming years, far outpacing overall energy demand. Over the past decade, electricity use grew twice as fast as total nal energy use, and this trend is accelerating. In STEPS, global electricity consumption is projected to rise about 3% annually to 2030.Each year, demand increases by roughly the amount consumed by a large industrialized economy. For perspective, the Outlook notes that the world will be adding the electricity use of the ten largest cities on Earth to global demand every year. Key drivers include burgeoning appliance ownership (e.g. air conditioners in developing countries as incomes rise),electrification of transport (the uptake of electric vehicles), and expanding digital infrastructure like data centers and AI .These factors push power demand sharply upward a sign that electricity is becoming the “fuel” of choice for development and modernization.
Global electricity consumption is projected to rise by 3% annually until 2030
On the supply side, the growth of electricity generation is dominated by low-carbon sources, principally renewables. WEO 2024 indicates that renewable power is expanding quickly enough to meet virtually all the increase in electricity demand through 2030 under current policies. In effect, every additional kilowatt-hour of demand growth can be met by extra generation from renewables, so that fossil fuel-based generation does not need to rise. This represents a major shift from the past, as even in recent years a significant share ofdemand growth was met by coal and gas. Now, surging installations of solar and wind are taking the lead. The Outlook notes that renewables deployment is occurring at unprecedented scale: for example, solar PV additions hit record highs (over 425 GW added globally in the past year) and could grow even faster given manufacturing capacity. Wind power and other renewables are also growing steadily By 2030,renewables (including hydropower) are on track to account for roughly half of global electricity generation up from about 30% today while coals share declines. In the STEPS scenario, renewables are expected to meet all net growth in electricity demand, enabling a 30% decline in fossil fuel-based generation by 2030 (coal- red power falls by 50%,gas by 15%) in advanced economies. Even in emerging economies like China and India, booming solar and wind are projected to satisfy the vast majority of new electricity needs tempering growth in coal use.
These trends point to a more electrified and cleaner power sector on the horizon. Yet, WEO 2024 also discusses challenges in balancing this new electricity landscape. One issue is managing peak electricity demand .Peak demand the highest load periods is rising faster than average demand, especially as air conditioning and electrification grow. In some regions, peak power demand could increase up to 80% faster than overall demand by 2035, straining grid capacity. Ensuring that power systems can meet these peaks (adequacy) and handle the variability of solar and wind output ( flexibility) becomes increasingly critical. The report highlights the need for investment in grids, storage, and demand-side management to maintain reliable electricity supply in a renewables-rich system.
IMPORTANTSTATISTICALDATA
4 Peak Fossil Fuel Demand: In the STEPS scenario, global demand for coal, oil, and natural gas is expected to peak by 2030, marking the first-ever plateau of overall fossil fuel consumption. After 2030, any further growth in energy demand can be met by clean energy, allowing economic growth without increasing fossil use
4 Electricity Demand Growth: Global electricity demand rises ~3% per year to 2030, about double the rate of total energy demand. This equates to adding on the order of 2,200 TWO of new demand (about +6%) by 2035 compared to last years outlook, or roughly the annual consumption of Japan being added every year
4 Renewables Expansion: Renewable energy (solar, wind, hydro, etc.) is projected to account for all net growth in power generation worldwide over the next decade. By the late 2020s,renewables generate about 45% of global electricity, up from ~30% today, while coals share falls toward one-quarter. Solar and wind capacity additions are at record levels e.g.solar PVinstallations in 2023 exceeded 425 GW, contributing to a total manufacturing capacity of 1,100 GW per year
4 Emissions Trajectory: Energy-related CO emissions reach an all-time high of~37 in 2023 and are expected to peak by 2025 under STEPS. Thereafter, emissions plateau and begin a slow decline (~1% per year post-2030) rather than the steep drop required for climate goals. In more ambitious scenarios, emissions would need to fall about 40% by 2035.
4 Energy Access: Despite progress, 675 million people worldwide still lack electricity access and 2.3 billion lack clean cooking as of2023.STEPS projections show nearly 200 million gaining electricity access by 2030, but this still falls short of universal access goals. Most of the underserved are in sub-Saharan Africa and developing Asia.
IMPLICATIONS AND POLICY RECOMMENDATIONS
The WEO 2024 findings carry significant implications for governments, businesses, and society. A core message is that while current policies are steering the energy system toward a plateau in fossil fuel use and a rapid rise in clean energy, stronger actions are needed to accelerate emissions reductions and meet international climate targets.
Policymakers are advised to build on the momentum of clean energy deployment to drive a meaningful decline in global emissions, rather than a mere peak. This entails enhancing and implementing pledges beyond STEPS for example, moving to the APS (announced pledges) or net-zero scenario through more aggressive measures. Governments should set clear long-term targets and frameworks that give investors confidence to fund low-carbon infrastructure at scale. The WEO suggests that the world has both the need and the capacity to go much faster in the clean energy transition. Ample manufacturing capacity for technologies like solar panels and batteries exists; the focus must shift to deploying this capacity and overcoming barriers. This will require concerted effort to rebalance investment flows toward emerging markets and developing economies. Today, a vast discrepancy exists many developing nations are starved of capital for clean energy despite huge potential. Addressing this calls for innovative financing mechanisms, risk mitigation tools, and international support (e.g. development banks) to mobilize investment in emerging economies. Reducing the cost of capital in these markets through policy stability and financial guarantees can unlock transformative clean energy growth where its needed most.
Another implication is the need to bolster energy security and resilience in a broader sense. As energy systems become more electrified and reliant on renewables, governments must ensure reliability through investments in grids, energy storage, and flexible resources. WEO 2024 underlines that energy security and climate goals go hand in hand scaling up clean energy improves energy independence and reduces exposure to volatile fossil fuel markets. Therefore, policy recommendations include accelerating grid expansion and modernization to handle rising electricity demand and integrate variable renewables. Enhancing regional interconnections and smart grid solutions will help manage peak loads and variability .Additionally, energy markets and regulations may need updates (such as capacity markets or demand response programs) to incentivize flexibility and ensure adequate supply during peak times or when renewables output is
low.
Diversifying supply chains for critical clean energy technologies is another strategic priority. The report notes that production of items like solar PV panels and battery components is heavily concentrated in a few countries (notably China). Policymakers should encourage geographic diversification by supporting domestic manufacturing and trade partnerships, which can improve resilience against disruptions. Initiatives like tax credits, local content requirements, and international cooperation (as seen in various countries recent policies) are steps in this direction.
For businesses and investors, WEO 2024 implies that the future growth opportunities lie in clean energy industries. Companies should align strategies with the expected peak and decline of fossil fuels this decade, reallocating capital toward renewables, electrification technologies, and efficiency solutions. The writing is on the wall that clean electricity is the growth market of the 21st century; industries from automakers (EVs) to appliance manufacturers to tech firms (data centers) will need to adapt to and capitalize on an electrifying economy.
In conclusion, WEO 2024 calls for a decisive scale-up of action. Governments are encouraged to use the analysis as a roadmap for speeding up the clean energy transition in ways that also enhance energy security and economic development. Key recommendations include: doubling down on renewable energy deployment (through auctions, incentives, removing permitting bottlenecks), investing in energy efficiency and electrification across sectors, supporting emerging technologies (like hydrogen and sustainable bio fuels for sectors where direct electrification is hard), and international collaboration to ensure no country is left behind in the transition. By heeding these recommendations, policymakers and stakeholders can turn the promising trends identified in WEO 2024 into a sustained trajectory toward a safer, more sustainable energy future.
INDIAN ECONOMIC OUTLOOK
India is set to dominate the global economic landscape, maintaining its status as the fastest-growing large economy for the next two fiscal years. The January 2025 edition of the World Banks Global Economic Prospects (GEP) report projects Indias economy to grow at a steady rate of6.7% in both FY26 and FY27, significantly outpacing global and regional peers. At a time when global growth is expected to remain at 2.7% in 2025-26, this remarkable performance underscores Indias resilience and its growing significance in shaping the worlds economic trajectory.
Indias economy is projected to grow at 6.7% in FY26 and FY27
The GEP report credits this extraordinary momentum to a thriving services sector and a revitalised manufacturing base, driven by transformative government initiatives. From modernising infrastructure to simplifying taxes, these measures are fuelling domestic growth and positioning India as a cornerstone of global economic stability. With its closest competitor, China, decelerating to 4% growth next year ,Indias rise is more than just a statistic. It is a powerful story of ambition, innovation, and unmatched potential.
Complementing the World Bank report, the latest update from the International Monetary Funds (IMF)World Economic Outlook (WEO) also reinforces Indias strong economic trajectory. The IMF forecasts Indias growth to remain robust at 6.5% for both 2025 and 2026, aligning with earlier projections from October. This consistent growth outlook reflects Indias stable economic fundamentals and its ability to maintain momentum despite global uncertainties. The continued strength of Indias economic performance, as projected by both the World Bank and IMF, underscores the countrys resilience and highlights the sustained strength of its economic fundamentals, making India a crucial player in the global economic landscape.
HIGHLIGHTS ON THE INDIAN ECONOMIC SURVEY 2024-2025
- Indias real GDP and GVA growth estimated at 6.4% in FY25 ( first advance estimates)
- The real GDP growth to grow between 6.3% and 6.8% in FY26
- To meet the requirements of infrastructure private sector participation will be crucial
- Capex improved continuously from FY21 to FY24 and post general elections, it grew YoY by 8.2%
- Capital expenditure on key infrastructure sectors grown at a rate of38.8% from FY20 to FY24
- RBI and the IMF project Indias consumer price inflation will align with target of4 FY26% in
- Retail headline inflation softened from 5.4% in FY24 to 4.9% in April December 2024
- BSE stock market capitalisation to GDP ratio stood at 136%,far higher than china (65%) and brazil (37%)
- Overall exports grew by 6 per cent, services by 11.6% (YoY) in the first nine months ofFY25
- Forex at USD 640.3 billion, sufficient to cover 10.9 months of imports and 90% of external debt
- Installed electricity generation capacity from non-fossil fuel source accounts for 46.8% ofthe total capacity
- Capital expenditure (capex) improved continuously from FY21 to FY24.Post general elections, capex grew YoY by 8.2% during July November 2024.
- The central focus of the government in the last ve years was on increasing public spending on infrastructure, and speeding up approvals and resource mobilization.
- The union governments capital expenditure on key infrastructure sectors has grown at a rate of38.8% from FY20 to FY24.
- Under railway connectivity,2031 km of railway network was commissioned between April and November,2024,and 17 new pairs of VandeBharat trains were introduced between April and October 2024.
- Under road network,5853 km of national highways was constructed in FY25 (April-Dec).
- Under national industrial corridor development programme, a total of 383 plots covering 3788 acres have been allotted for industrial use for various sectors in phase 1.
- A15.8% year-on-year increase in renewable energy capacity of solar and wind power by December 2024.
- The share of renewable energy in Indias total installed capacity now stands at 47.%
- Governments schemes like the DDUGJY and the SAUBHAGYA improved electricity access in rural areas, electrifying 18,374 villages and providing electricity to 2.9 crore households.
- City transportation network is expanding rapidly, with metro and rapid rail systems operational or under construction in 29 cities, covering over 1,000 kilometres.
OVERVIEW
Electricity 2025 is the IEAs annual report focused specifically on the global electricity sector, providing an in-depth analysis and forecast through 2027. Now in its sixth edition, this report examines trends in power demand, generation supply mix, and related CO emissions across different regions. The purpose of Electricity 2025 is to shed light on the evolving electricity landscape in what the IEA calls a “new Age of Electricity,” where electrification of end-uses and economic growth are rapidly increasing power consumption. The report not only offers detailed forecasts for electricity demand and supply for 2025, 2026, and 2027 at global and regional levels, but also delves into emerging challenges in the power sector. It discusses resource adequacy (whether sufficient generation capacity exists to meet peak demand), the rising share of weather-dependent renewables and what that means for reliability, and the measures needed to ensure the security and resilience of electricity systems. This years edition includes special spotlights, such as an analysis of Chinas surging power demand and a section on the growing incidence of negative wholesale electricity prices in some markets and what they imply. Overall, Electricity 2025 serves as a comprehensive guide for policymakers, utilities, and stakeholders to understand short-term power market trends and to anticipate potential issues in keeping the lights on amid a transforming energy mix.
KEY FINDINGS
Electricity 2025 reports that global power demand is growing robustly after a relatively slow increase in 2023, heralding a new era of electricity consumption. Worldwide electricity demand is set to rise by about 3% in 2024 and average around 3% annual growth through 2027, a notable acceleration from the 2023 growth rate of 2.5%. This renewed growth is overwhelmingly driven by emerging and developing economies. The report finds that 85% of the increase in electricity demand through 2027 will come from emerging market and developing economies, with Asia playing a pivotal role. In fact, more than half of global demand growth in 2024 alone is attributed to China, where electricity usage jumped ~7% in 2024 and is forecast to expand ~6% annually on average to 2027. Indias power demand is likewise booming projected to grow about 6.3% per year in 2025 2027, outpacing its average growth over the past decade. Other regions in Southeast Asia and the Middle East also see strong increases, largely due to economic expansion and rising ownership of air conditioners, among other factors. By contrast, Africas demand growth remains modest, and the report notes with concern that roughly 600 million people in sub-Saharan Africa still lack access to electricity, underscoring a continued gap in energy equity.
Crucially, advanced economies are also experiencing an upswing in electricity use, reversing a decade-long trend of at or declining demand. While OECD countries electricity consumption was essentially unchanged over 2021 2024, it is now expected to rise and contribute about 15% of global demand growth from 2025 to 2027. Nations such as the United States, Europe (EU), Japan, and Korea are seeing electricity needs climb again as their transport and heating sectors begin to electrify. For example, U.S. electricity demand rebounded by 2% in 2024 (to a record high) after a dip in 2023, and is forecast to grow ~2% annually in 2025 2027. This U.S. growth alone is equivalent to adding the current electricity consumption of California over three years. In Europe, power demand, which fell in 2022 2023 due to an energy crisis and mild weather, inched up in 2024 (especially in household and commercial use thanks to heat pumps and EVs) and is expected to recover further, though the EUs total consumption may not regain 2021 levels until after 2027. The return of growth in advanced economies is largely attributed to electrification of transport (EV charging), heating (heat pumps), and growing data center usage, which are overcoming the counteracting factors of energy efficiency gains and industrial offshoring that had kept rich-world demand at for years
On the supply side, low-carbon generation is surging to meet the rising demand. Electricity 2025 projects that **renewables and nuclear will together provide all the net growth in global electricity supply through 2027, such that the total generation from fossil fuels stays around current levels or declines slightly. In fact, renewables alone are expected to account for about 95% of the increase in power generation worldwide over the forecast period. This rapid expansion means that by 2025, renewables (led by solar, wind, and hydropower) will produce over one-third of the worlds electricity, overtaking coal as the largest source of power generation. This milestone reflects significant growth especially in solar PV: global solar generation reached ~2,000 TWh in 2024 (about 7% of global electricity, up from 5% in 2023) and is set to add roughly 600 TWh of output per year going forward. Solar PV is poised to contribute roughly half of all additional electricity demand growth worldwide during 2025 2027 a stunning rise for a single technology. Wind power is also expanding steadily and expected to meet around one-third of the demand growth in that period. Meanwhile, nuclear energy is on a comeback, with global nuclear generation projected to hit a new record high in 2025 and continue growing as Frances reactors come back online, Japan restarts units, and new reactors start up in China, India, and elsewhere. This resurgence underscores nuclears role as a stable backbone in many countries clean power strategies.
By 2030, renewables will generate over one-third of global electricity, surpassing coal as the largest power source.
As a result of renewables growth crowding out fossil generation, power sector CO emissions are plateauing. After rising by about 1.4% in 2023 and 1% in 2024, global CO emissions from electricity generation are expected to stabilize at roughly 13.8 billion tonnes annually through 2027. This leveling off is a significant improvement from past trends and is driven by the expanding use of zero-emission sources and a attening of coal use. Notably, the report foresees the share of coal- red electricity dropping below 33% of global generation for the first time in this century during the forecast period. Coal power output is essentially stagnant or declining in most regions (with particularly steep drops in Europe and the U.S.), offset only partly by increases in some Asian countries. Natural gas- red generation sees a modest uptick of around 1% per year globally to 2027, with declines in Europe and the Americas outweighed by growth in the Middle East (where oil-to-gas switching in power plants is occurring) and in parts of Asia. Even where gas use falls, its role in providing peak flexibility remains vital.
The analysis also highlights improving conditions in power markets: wholesale electricity prices in 2024 fell by roughly 20% on average in major regions (EU, UK, U.S., India) compared to 2023, thanks to lower fuel costs and the uptick in renewables generation. However, price levels in many markets are still above pre-2020 norms, and price volatility is increasing. Some regions are witnessing more frequent occurrences of negative electricity prices, when abundant solar or wind output exceeds demand. Areas like parts of Australia, California, and several European countries have seen negative prices crop up, signaling that system flexibility is insufficient at times to absorb all the renewable energy. This trend, while still relatively limited, points to the need for greater grid flexibility (through storage, demand response, etc.) to efficiently integrate renewable surges.
In summary, the key findings of Electricity 2025 are: demand is undergoing a growth spurt led by Asia and now including advanced economies; renewables are rising to the challenge, scaling up fast enough to cover new demand and displace some fossil generation; the power sectors emissions are nearing a peak as coals dominance recedes; and maintaining reliability and market stability will require addressing the challenges brought by rapid change, such as grid bottlenecks and price volatility.
ELECTRICITY SUPPLY AND DEMAND TRENDS
Electricity 2025 provides a granular look at supply and demand dynamics in the power sector across different regions:
4 Demand Trends:
Global electricity demand is projected to increase by about 8300 TWh from 2023 to 2027, reaching new highs each year. The lions share of this growth comes from emerging economies. Asia in particular is a powerhouse of demand: Chinas annual electricity use is forecast to climb from about 8,500 TWh in 2024 by roughly 6% per year, reflecting its rapidly electrifying economy. By 2027, China alone will approach or exceed 10,000 TWh of consumption, cementing its status as the worlds largest electricity consumer. Indias demand, around 1,700 TWh in 2024, is on track to rise over 20% to roughly 2,000 TWh by 2027, driven by industrialization and a growing middle class. Southeast Asia collectively also sees strong growth as countries like Indonesia, Vietnam, and others expand electri cation. In contrast, many African nations have low but gradually rising consumption; the persistent lack of access in parts of Africa means demand growth is constrained by infrastructure and economic limits
Global electricity demand is projected to rise by 8,300 TWh from 2023 to 2027.
In advanced economies, after a period of stagnation, demand is picking up mainly due to new electrified loads. For example, the United States (about 4,200 TWh/year demand in 2024) should add on the order of 250 300 TWh by 2027 (roughly +2%/year), propelled by sectors like tech (data centers) and transportation (EV charging). The European Union (around 2,800 TWh in 2024) is expected to see modest net growth (~1% or less annually), as efficiency measures and high energy prices temper usage, but rising adoption of electric heating and vehicles provides a new pull-on power consumption. In Japan and Korea, similar patterns of moderate growth are anticipated as electrification efforts counteract efficiency gains. An important trend is that in advanced economies, per-capita electricity use, which had been at or declining, will begin rising again, indicating a structural shift toward electricity for more energy services
4 Supply and Generation Mix:
The generation mix is undergoing a rapid transformation. By 2025, renewable energy (including hydro, wind, solar, bio energy) will collectively become the largest source of electricity globally, surpassing coal. This transition is largely due to the massive scale-up of solar PV and wind. According to the forecast, annual solar PV generation will increase by ~600 TWh each year through 2027. This means that by 2027, solar alone could be producing on the order of 3,800 4,000 TWh per year worldwide, roughly doubling its current output. In several regions, solar is already making a huge impact: in 2024, solar PV output in the EU exceeded that of coal for the first time, and China, the U.S., and India are all on track to see solars share of generation reach 10% or more by 2030. Wind power is also growing steadily, contributing about 300 400 TWh of additional generation globally each year, so that wind plus solar together account for the vast majority of new electricity supply Thanks to this growth, renewables are set to overtake coal globally in 2025 as noted, and they continue gaining ground thereafter. By 2027, the report expects renewables to provide around 35 38% of global electricity, up from 30% in 2023. Coal- red generation, which increased slightly in 2023, is forecast to attend out and then decline in some key regions. In fact, the strong expansion of renewables means that coals share of generation falls below one-third by 2027, a significant symbolic threshold. Regions like Europe and North America see notable drops in coal usage as renewable output rises and some coal plants retire or run at lower utilization. Natural gas generation grows modestly in absolute terms (particularly in gas-rich regions of the Middle East and in South/Southeast Asia where gas infrastructure is expanding), but even gass share remains roughly at globally, as it mainly plays a role of balancing variable renewables rather than meeting new base load growth. Meanwhile, nuclear energys uptick (with increments of tens of TWh per year) contributes to low-carbon supply, especially in markets like France (recovering from outages) and Asia (new builds).
The net effect is that virtually all new demand is supplied by clean energy. The report emphasizes that from 2023 to 2027, the increase in global electricity generation from renewables (~2,450
TWh increase) plus nuclear (~220 TWh increase) is more than sufficient to cover the increase in total electricity demand, enabling a slight decline in aggregate fossil-fueled generation. This is a marked change from previous decades, and it implies that global power sector emissions will plateau.
4 Regional Supply Note:
China stands out: it is adding huge capacities of solar and wind such that about 90% of its new electricity demand to 2027 is met by renewables. This keeps Chinas coal generation growth very limited despite rising demand though weather variability can cause year-to-year fluctuations. In the United States and Europe, renewables growth (along with at demand in some years) means that fossil generation (coal and even gas) continues to decline or remain subdued. By 2027, for instance, U.S. coal generation is expected to be considerably lower than today as older plants retire, and gas gains are moderated by competition from cheap renewables and increasing battery storage deployments.
Overall, the trends depict a cleaner electricity supply catering to a rapidly electrifying demand base, with regional differences in pace. The worlds power systems are moving into unprecedented territory: higher renewable penetration, higher electricity dependence, and the need for a more flexible grid.
IMPORTANT STATISTICAL DATA
4 Global Demand Growth (2024 2027): ~3% per year on average. Emerging economies account for ~85% of this growth, with China alone contributing over half of the increase in 2024. Advanced economies contribute ~15% of demand growth as their consumption resumes an upward trend. In absolute terms, world electricity demand is forecast to rise from about 27,000 TWh in 2023 to roughly 31,000 TWh in 2027.
4 China and India: Chinas electricity demand grows ~6% annually to 2027, reaching ~10,000 TWh/year; it grew +7% in 2024 alone. India grows ~6.3% annually, from ~1,500 TWh in 2023 to ~2,000 TWh by 2027, reflecting the fastest growth rate among major economies.
4 Renewables vs Fossil Generation: Low-emissions sources (renewables and nuclear) are expected to meet 100% of global demand growth through 2027. In 2025, renewables provide over one-third of world electricity (forecast ~35%), surpassing coal as the top generation source. By 2027, renewables share is ~38 40%, coal falls below 33% ( first time <1/3 of mix), and gas remains ~23%.
4 Solar Power Surge: Solar PV is the fastest-growing source. In 2024 it generated ~2,000 TWh ( 7% of global generation). From 2025 2027, solar output rises by ~600 TWh per year, meaning each year solar adds generation roughly equivalent to all of South Koreas annual electricity use. Solar is projected to supply ~10% of global electricity by 2030.
4 CO Emissions Plateau: Power sector CO emissions ~13.8 Gt in 2024 and are projected to remain around 13.8 14 Gt through 2027, essentially atlining despite demand growth. This plateau is an improvement from +1% increases in 2023 24 and indicates
peaking. Declines in EU and U.S. power emissions (due to less coal) are offset by increases in India and Southeast Asia
4 Wholesale Prices & Flexibility: Average wholesale electricity prices in major markets (EU, UK, U.S., India) were down roughly 20% in 2024 vs 2023 as fuel prices eased. However, occurrences of negative prices have grown in regions like California, South Australia, and parts of Europe, reflecting moments of oversupply from renewables. These incidents highlight a need for more grid flexibility (e.g., storage or demand shifting).
IMPLICATIONS AND POLICY RECOMMENDATIONS
The Electricity 2025 reports findings have important implications for how we plan and operate power systems, and it offers several insights and recommendations for policymakers and industry players:
1. Ensure Resource Adequacy: With global electricity demand hitting new highs, especially driven by emerging economies and new uses, adequate generation capacity must be maintained. Policymakers should closely monitor reserve margins and capacity needs, particularly as some traditional power plants (coal, gas, nuclear) retire. The report suggests employing advanced modeling (e.g., probabilistic adequacy assessments) to better understand the risk of shortfalls and to plan for sufficient rm capacity. In practice, this may mean incentivizing investments in dispatchable resources which could include gas peaker plants, hydro dams, battery storage, or demand-response programs that can be called upon during peak periods or when renewable output is low. Capacity markets or strategic reserves are tools some regions use to ensure there is always enough backup. The key recommendation is to integrate new demand growth and variability into planning processes so that reliability is not compromised in this new age of electricity.
2. Improve Grid Flexibility and Stability: The growing share of solar and wind, while crucial for decarbonization, brings variability and sometimes surplus power (as indicated by rising negative price events). To handle this, grid operators and regulators need to prioritize flexibility. This includes investing in energy storage systems (such as utility-scale batteries, pumped hydro storage) and encouraging flexible demand (through smart charging of EVs, thermal storage, industrial demand response, etc.). Policy can help by removing barriers for storage deployment, updating market rules to reward fast-ramping and balancing services, and implementing time-of-use pricing that incentivizes consumers to shift load to times of high renewable output. The occurrence of negative prices is essentially a signal; as the report notes, price signals alone may not surface proactive measures (like mandating storage procurement or flexible interconnections) may be required. Grid expansion and interconnection is another aspect: strengthening transmission links both within countries and between them can smooth out local fluctuations (for example, allowing excess solar in one region to be sent to another with higher demand).
3. Manage the Coal Transition: With coals share in decline and many countries looking to phase down coal- red generation, policymakers in coal-reliant regions face the challenge of replacing that capacity and ensuring a just transition. The report shows coal use stagnating or dropping by 2027, which is good for emissions, but it means regions like parts of Asia must plan alternatives. Recommendations include extending the life of existing gas plants or building new efficient gas units as a bridging solution (where feasible and if gas is available) to provide reliability as coal plants retire acknowledging that gas itself should be transitional and its emissions need mitigation in the long term. Another recommendation is to retro t some remaining coal plants for flexibility and lower emissions. For instance, China has implemented policies to retro t coal units to operate more exibly at lower loads to complement renewables. This can provide reserve power without needing to run coal at high output continuously. At the same time, plans should be laid for worker retraining and economic diversification in coal-dependent communities, aligning with broader just transition goals.
4. Accelerate Renewables and Grids: Although renewables are meeting new demand growth, there is an implicit recommendation to continue (and even accelerate) this build-out to not only meet growth but start substantially reducing fossil generation (to cut emissions). Governments should maintain strong support for renewables through auctions, feed-in tariffs, tax credits like the U.S. IRA, and streamlined permitting to ensure the pipeline of projects remains robust. The report highlights that many countries are already breaking deployment records, but also that grid connection queues are a growing bottleneck (with at least 1,650 GW of projects globally waiting for grid connection). Thus, policy must not neglect grid infrastructure: planning and investing in transmission is critical to connect new wind and solar farms. Governments and regulators may need to reform grid planning processes, allocate funds for transmission expansion, and update regulations to speed up interconnection approvals. The implication is that without adequate grids, even if generation is built, it cannot deliver its full value.
5. Address Energy Access and Affordability: The reports note on Africas 600 million without electricity calls for action on energy access. Policymakers in developing countries, with support from international partners, should invest in off-grid and mini-grid solutions, renewable-based rural electrification, and financial mechanisms to make electricity affordable to the poorest. Expanding access can also spur demand growth in a sustainable way if done with renewables.
6. Market Reforms for the Evolving Mix: Electricity markets may need reform to remain effective with a high-renewable system. For example, as zero-marginal-cost solar and wind supply more energy, energy-only markets could see more periods of very low or volatile prices. The reports findings about volatility suggest introducing or enhancing mechanisms like ancillary service markets (to reward flexibility), capacity remuneration (to ensure reliable capacity is valued), and carbon pricing (to further discourage high emissions during peak times) could be beneficial. Policymakers and regulators should ensure that market designs send the right signals for investment in both generation and grid assets in this new context.
In conclusion, Electricity 2025 underscores that the coming few years are pivotal for setting the power sector on a reliable, clean trajectory. The recommendations revolve around balancing the trilemma: scale up clean generation to meet demand and climate goals, invest in reliability and flexibility to secure supply at all times, and modernize policy and market frameworks to facilitate this transition. By following these recommendations, governments and utilities can harness the opportunities of the “new Age of Electricity” cleaner air, technological innovation, and economic growth while mitigating the risks of outages, inefficiencies, or inequities in the power sectors transformation.
OVERVIEW
Renewables 2024 is the IEAs annual report on the renewable energy sector, offering analysis and forecasts for the deployment of renewables across electricity, transportation, and heating through 2030. This report provides a comprehensive update on the global growth of renewable technologies and assesses whether current trends align with international climate and energy goals notably the ambitious target set at COP28 to triple global renewable power capacity by 2030. The purpose of Renewables 2024 is twofold: forecast and track progress. It delivers detailed country-by-country forecasts for renewable capacity additions and generation in the electricity sector, as well as uptake of renewables in transport (like bio fuels and electric mobility) and heating. In doing so, it identifies key drivers and barriers in growth in each sector and region. Secondly, the report serves as a checkpoint on global targets: it examines whether the world is on course to achieve the COP28 goal of tripling renewable capacity and highlights any shortfalls. Uniquely, the 2024 edition introduces a special chapter on renewable fuels including bioenergy, biogas/biomethane, hydrogen, and synthetic e-fuels evaluating their potential contribution to energy demand and emissions reduction by 2030. Additionally, the report explores critical issues for the renewables industry such as policy developments, supply chain and manufacturing trends (e.g., solar panel and wind turbine production), technology costs, the expansion of electrolysers for green hydrogen, and challenges in integrating renewables into energy systems (for example, grid connection delays and managing variability). In summary, Renewables 2024 provides a thorough and forward-looking overview of the renewable energy landscape, intended to guide policymakers, investors, and stakeholders on how to maintain and accelerate the growth of renewables in line with global climate objectives.
KEY FINDINGS
Renewables 2024 nds that global renewable energy capacity is on a strong growth trajectory, but meeting the full scope of international aspirations will require further effort. According to the reports main case (which reflects current policies and market conditions), the world is expected to add about 5,500 GW of new renewable capacity by 2030, reaching a total installed renewable capacity roughly 2.7 times the level of 2023. This means global renewables capacity would be just shy of tripling by 2030 an expansion nearly 25% above what countries have currently pledged, yet still short of the COP28 “tripling” target. In percentage terms, the forecast growth (170% increase from 2023 to 2030) is impressive, but it falls about 10% short of tripling (which would require ~11,000 GW total capacity by 2030). The gap indicates an “ambition and implementation” gap that needs addressing to fully meet the goal.
The world is expected to add about 5,500 GW of new renewable capacity by 2030
Crucially, two main engines are driving the renewables boom: solar PV and China. Solar photovoltaic power is by far the largest contributor to new capacity. Together, solar PV and wind are projected to account for 95% of all renewable capacity growth this decade, thanks to their rapidly improving economics and widespread adoption. Solar leads the charge, with annual PV installations increasing every year to reach almost 940 GW in 2030 about 70% higher than the record set in 2022. This extraordinary scale-up is fueled by supportive policies and the plummeting cost of solar modules. In fact, 2023 was a breakout year: global solar PV additions nearly tripled compared to recent years, reaching an estimated 261 GW of new PV capacity in 2023 alone. This was part of a record ~565 GW of total renewable additions worldwide in
2023 (a 60% jump from 2022), a clear indication that renewables growth has entered a new, higher gear. On the country side, China dominates the scene. The report projects that China will account for about 60% of the global increase in renewable capacity to 2030. In other words, nearly every other megawatt of new renewables installed worldwide this decade will be in China. China has already surpassed its own 2030 target (1,200 GW of combined solar and wind) in 2024, years ahead of schedule. This overachievement is credited to aggressive policies and massive investments: Chinas solar PV capacity quadrupled and wind capacity doubled in just the four years since it ended feed-in tariffs in 2020. Comprehensive support at both large-scale (utility projects) and distributed (rooftop solar) levels underpins Chinas success
Other regions are also set to contribute significantly. The report highlights that the European Union and the United States will both double their annual renewables expansion rate in 2024 2030 compared to the past. In Europe, this puts the EUs goal of 600 GW solar PV by 2030 within reach (though wind installations need to accelerate to hit wind targets). The U.S. growth is bolstered by the Inflation Reduction Acts incentives, spurring large-scale solar, wind, and battery projects. India emerges as the fastest-growing renewables market in relative terms among large economies, with its capacity forecast to almost triple from 2022 to 2030 (adding ~350 GW) aligning with Indias own ambitious targets and the global tripling effort.Indias growth rate exceeds that of Chinas in percentage terms, albeit from a smaller base, driven by competitive auctions and new policies supporting rooftop solar and other renewables.
Despite these positive trends, the report identifies areas of concern. One is that even the robust main-case growth might not fully attain the tripling goal; the IEA therefore also presents an accelerated case wherein additional policy measures could push global renewable capacity to ~11,000 GW by 2030 effectively tripling it. The accelerated case assumes faster resolution of permitting and integration challenges and stronger targets in the next round of Nationally Determined Contributions (NDCs). Another concern is grid integration: The rapid addition of wind and solar is leading to challenges such as higher curtailment in some areas and long connection queues. The report notes that in countries where grids and permitting arent keeping pace, renewable projects face delays and output restrictions. Additionally, renewable fuels like biofuels and hydrogen, while crucial for decarbonizing transport and industry, are not scaling as fast as power generation. For instance, the report foresees that by 2030, hydrogen-related demand will drive only ~43 GW of renewable capacity (less than 1% of the expansion) , indicating that sectors like green hydrogen are still in early stages relative to power sector growth.
In summary, the key findings of Renewables 2024 are that global renewables growth is unprecedented and even exceeding many government targets, signalling an opportunity for countries to raise their ambitions. Solar is taking the lead as the cheapest and most deployable option, wind is also growing strongly, and Chinas outsized role is reshaping the global distribution of capacity. However, to meet a full tripling and to integrate this new capacity effectively, policy support needs to be enhanced and system adaptations are required. The report paints a picture of strong momentum with a few critical gaps left to close.
ELECTRICITY SUPPLYAND DEMAND TRENDS
Renewables 2024 largely focuses on renewable supply-side trends, but these have direct implications for electricity supply and demand balances through 2030. The reports analysis indicates that renewables will capture an increasing share of electricity generation worldwide ,meeting most of the growth in electricity demand and even displacing a significant portion offossil-based generation by 2030.
Global Renewable Generation Growth:
Renewable electricity generation (from sources including hydropower, wind, solar, bioenergy, etc.) is forecast to reach over 17,000 TWh by 2030, which is an increase of almost 90% compared to 2023 levels. This rapid growth means that renewables will account for the vast majority of new power supply. In fact, from 2023 to 2030, more than three-quarters of the increase in global power output will come from renewable sources, thanks to continued supportive policies in over 130 countries and ongoing technology cost declines. To put this in perspective, the additional renewable generation by 2030 is roughly equivalent to the combined current electricity demand of China and the United States an enormous expansion.
Shifting Generation Mix:
As renewable output nearly doubles, several milestones in the electricity mix are expected (see Table below). These tipping points illustrate how renewables are overtaking or surpassing traditional generation sources one by one:
By 2030, solar PV is set to be the leading source of renewable electricity globally, followed by wind, with both far exceeding output from hydropower (which for decades was the top renewable source). The share of wind and solar in global generation will roughly double from about 15% in 2023 to 30% in 2030, reflecting their meteoric rise. Meanwhile, the overall renewables share of electricity (including hydro,bioenergy , etc.) climbs from around 30% in 2023 to roughly 50% by 2030. This means that by the end of the decade, half of the worlds electricity could be coming from renewable sources a huge transformation in the power sectors fuel mix.
Integration and Demand Matching:
The report acknowledges that such high penetration of renewables will have implications for electricity supply-demand balancing. One aspect is the need for flexibility: as noted, increasing wind and solar is already leading to higher instances of curtailment in some markets where renewable output is curtailed because supply exceeds what the grid can handle or demand at that moment. Without interventions, these instances could grow, which means some of the potential generation from renewables would be wasted. To minimize curtailment, the deployment of storage, grid expansion, and demand-side management must keep pace. Another aspect is meeting demand peaks when renewables might be low (e.g., after sunset or during low-wind periods).The forecasted substantial growth of renewables assumes that these challenges are managed through improved system integration measures.
Renewables in Final Demand (beyond electricity):
While electricity is the largest part of the renewables story, Renewables 2024 also covers transport and heat. In transport, biofuels (like ethanol and biodiesel) continue to grow,and electric vehicles (which indirectly increase renewable electricity demand) see rising adoption. However, oil still dominates transport in 2030 in the main case. For heating, renewables (biomass, solar thermal, heat pumps using renewable power) make gradual inroads. The key takeaway is that renewables impact on overall energy demand is rising: by 2030 about 19% of total nal energy consumption could be met by renewables (up from ~11% in 2020),largely thanks to the power sector gains.
In essence, the trends described in Renewables 2024 depict a world where renewables supply an ever-growing portion of electricity demand. If current momentum is maintained or strengthened, renewables will not just keep up with demand growth but begin to decisively undercut fossil fuel generation, leading to a cleaner electricity mix by 2030.The interplay between this supply surge and demand (which is itself increasing, particularly through electrification) will de ne how successfully the energy transition progresses on a global scale in the near term.
IMPLICATIONS AND POLICY RECOMMENDATIONS
1. Raise Ambition and Strengthen Targets:
With the analysis showing that current policies would lead to a 2.7? increase in renewables by 2030 (short of the 3? goal), governments are encouraged to increase their renewable energy targets and align their action plans accordingly. The report notes that only 14 countries had explicitly included renewable capacity targets in their initial NDCs for 2030. Given the stronger-than-expected growth, there is an opportunity (and need) for countries to submit enhanced NDCs by 2025 that commit to higher renewable deployment. This sends a clear signal to markets and can galvanize further investment. Essentially, policymakers should not be complacent with current goals if they are already being surpassed; instead, set more ambitious milestones (for example, raising national targets for 2030 or introducing targets for 2035) to push towards the global tripling objective.
2. Tackle Permitting and Grid Bottlenecks:
A critical recommendation is to streamline the permitting process and expand grid infrastructure to accommodate the rapid growth of renewables. The report identifies slow permitting and lengthy interconnection queues as major barriers that could slow down renewable deployment despite strong economics. Governments should implement reforms such as one-stop-shop permitting agencies, time-bound approval processes, and standardized procedures to shorten project lead times. Additionally, strategic planning and investment in transmission and distribution networks is essential both to connect new large-scale renewable projects (often located in resource-rich areas far from load centers) and to enable distributed resources (like rooftop solar) to feed into the grid. This includes cross-border interconnectors where relevant, to share clean power across regions. Without proactive grid development, many ready-to-build renewable projects will remain stuck in queues. The report notes that as of 2024, at least 1,650 GW of projects globally are in advanced development awaiting grid connection. Clearing this backlog through grid upgrades and fair connection rules should be a priority.
3. Enhance System Flexibility and Integration:
As renewables grow to supply a large portion of electricity, maintaining reliability and minimizing curtailment will require greater flexibility. Policy measures to support energy storage, demand response, and flexible operation of existing power plants are recommended. For example, governments can incentivize battery storage deployment (through grants, targets or procurement mandates) and update market designs to reward storage and flexible capacity for their grid services. Also, encouraging the use of demand-side management such as smart charging for EVs or variable pricing to shift industrial loads can help align demand with renewable supply. Some countries may follow examples like Chinas push to retro t coal plants for flexibility or invest in peaker plants that run on lower-carbon fuels, to ensure stability when solar and wind output uctuate. Integrating high shares of renewables also calls for improved grid operations (better forecasting, regional coordination). Policymakers and grid regulators should adopt practices and technologies (advanced inverters, virtual power plants, etc.) that enable a “new power system dominated by variable renewables”, a vision China has explicitly started planning for
4. Support Diverse Renewable Technologies:
While solar and wind are leading, the report hints at not overlooking other renewables and enabling technologies. Hydropower and geothermal still play roles in certain regions and can provide baseload or flexibility, so ensuring their sustainable development (and refurbishing older hydro plants for efficiency and safety) is important. The relatively slow growth of renewable fuels like sustainable biofuels, biogases, and green hydrogen suggests that more policy support is needed for these areas to decarbonize sectors that electricity cannot easily reach (e.g., aviation, heavy industry). Governments could establish blending mandates for biofuels, funding for advanced biofuel plants, or targets for green hydrogen production with associated incentives. For instance, implementing targets for electrolyzer deployment (as the EU has done) and funding R&D/pilots for e-fuels would help accelerate these technologies. The implication is that a holistic renewables strategy extends beyond power generation to include fuels and heat areas that will become increasingly important for deeper decarbonization after 2030.
5. Address Supply Chain and Investment Needs:
The report brings out an interesting dichotomy: a potential oversupply in solar manufacturing versus underinvestment in wind manufacturing. Policymakers should aim for balanced growth by possibly supporting segments that are lagging. For example, wind turbine supply chains (especially offshore wind) face higher costs and bottlenecks; incentives or public financing could encourage new factories for blades, towers, and other components, particularly outside of China to diversify supply. At the same time, for solar manufacturing, which has seen massive expansion mainly in China leading to price crashes, policies elsewhere like manufacturing tax credits (e.g., in the US IRA or Indias PLI scheme) help build domestic capacity, but care is needed to avoid a glut that could bankrupt producers. International cooperation on trade ensuring that affordable panels can reach all markets paired with measures to prevent any one regions dominance from becoming a vulnerability, is prudent. Investment overall needs to scale up: the accelerated case requires significantly more capital. Thus, ensuring favorable financing conditions (low-cost green nance, risk mitigation, carbon pricing to improve profitability of renewables over fossil alternatives) is a key recommendation. This is especially true in developing countries, where high interest rates and perceived risks impede renewable projects.
6. Leverage Industrial Policy for Renewables Deployment: The report shows that industrial policies encouraging local manufacturing (like those in the US, EU, India, etc.) are fostering domestic renewables markets. This indicates co-benefits: jobs and economic growth alongside clean energy. Policymakers should continue to craft win-win policies that tie economic development with renewables rollout. For instance, requiring a portion of components to be made locally can build political support for renewables, as long as it doesnt overly in ate costs. Training programs and workforce development in renewable industries are likewise important to ll the human capital needs of this rapidly growing sector.
In conclusion, Renewables 2024 suggests that the world is broadly on the right track with an unprecedented surge in clean energy, but to fully meet climate goals and the tripling pledge, policy action must intensify. Governments and stakeholders are urged to capitalize on the momentum: adopt more ambitious targets, remove administrative hurdles, invest in grids and flexibility, and ensure a robust supply chain. By following these recommendations, policymakers can help bridge the remaining gap turning the substantial 2.7? growth into a full tripling and lay the groundwork for continued renewable energy expansion beyond 2030, ultimately steering the world closer to a net-zero emissions trajectory.
NUCLEAR ENERGY TRENDS: GLOBAL AND INDIA
INSTALLED NUCLEAR POWER CAPACITY TRENDS
Global: Global nuclear power capacity has seen modest growth in recent years. In early 2022, worldwide operable nuclear capacity was about 413 414 GW. New additions of roughly 8 GW in 2022 including reactors in China inched this higher, though nuclear expansion remains slower than needed for climate goals. By the end of 2023, the global feet reached around 420 operating reactors, setting the stage for record-high nuclear generation expected in 2025. This gradual capacity rise reflects a handful of new reactors coming online (e.g. Finlands Olkiluoto-3 in 2023) even as some older units retire.
India: Indias nuclear capacity has also increased slightly. As of early 2025, India has about 8.1 GW of operable nuclear capacity (23 24 reactors) . This is up from roughly 6.7 7 GW a few years ago, largely due to the completion of new domestic pressurized heavy water reactors (PHWRs) like Kakrapar-3 (700 MW) and power upgrades. Indias nuclear expansion has been incremental, constrained by lengthy project timelines and past material supply hurdles, but capacity is on a slow upward trajectory. Several reactors under construction will further boost Indias capacity in coming years (see below) .
POLICY DEVELOPMENTS AFFECTING NUCLEAR
ENERGY GROWTH
Global: Policy support for nuclear energy has strengthened across many countries in the last three years, driven by energy security and climate goals. Over 40 countries now have plans or pledges to expand nuclear power. Notable recent policy actions include:
4 United States: The Inflation Reduction Act (2022) introduced a production tax credit for zero-carbon nuclear power, improving the economics of existing reactors and providing incentives for new builds. This marked a significant federal support for nuclear, aiming to preserve the USAs ~20% nuclear share of generation.
4 France: In 2022 France committed to build 6 new large reactors (with an option for 8 more) to supply about 10% of its power, reversing decades of phase-down policy. The first of these new reactors is slated for commissioning by 2035, signalling a renewed long-term expansion of Frances 70%-nuclear electricity mix.
4 Japan: In 2023, Japan enacted regulatory changes under its Green Transformation program to allow reactor lifetimes beyond 60 years (excluding outage periods) . After the Fukushima shutdowns, Japan is maximizing use of the existing eet and planning new nuclear plants, marking a major policy shift to restore nuclears role (targeting ~20% of generation) with stringent safety oversight.
4 China: China continues strong policy support for nuclear, leading the world in new reactor builds. It connected two large reactors in 2022 and started construction on four more, with plans to further accelerate deployment. Nuclear expansion is a pillar of Chinas strategy to curb coal use, and its government has set ambitious long-term targets, making China the fastest-growing nuclear power program today.
4 Newcomer Countries: Emerging economies have also advanced pro-nuclear policies. For example, Poland in 2022 approved its first-ever nuclear power project (using U.S.-Westinghouse AP1000 reactors) as part of a national energy security strategy. Similarly, the United Kingdoms 2022 Energy Security Strategy calls for up to 24 GW of nuclear by 2050 (about 25% of electricity) through large reactors and SMRs. These policy moves, alongside others in South Korea, Canada, and Belgium, indicate a broad global pivot toward reviving and expanding nuclear energy.
India: The Indian government has made significant policy moves to boost nuclear growth in the past three years. India reaffirmed its commitment to nuclear expansion by maintaining a target of 22.5 GW nuclear capacity by 2031 (announced in 2018), which was reiterated by of in December 2022 and again by the Department of Atomic Energy in early 2025. In December 2023, India launched the “Viksit Bharat” (Developed India) initiative, outlining an energy strategy to 2047 that elevates the role of nuclear power. Subsequent policy steps include the 2024 25 Union Budget announcement to develop Bharat Small Reactors (Indias indigenous small modular reactor concept). In February 2025, the government unveiled a Nuclear Energy Mission under Viksit Bharat, pledging federal funding to build at least ve domestically designed SMRs by 2033 and proposing legislative amendments to enable private sector participation in nuclear projects. This is a landmark shift, as Indias nuclear industry has been state-owned; opening it up could attract new investment and technology. At the same time, Indias nuclear liability law
(in force since 2010) which places heavy liability on suppliers has been a policy hurdle, deterring foreign reactor vendors. The governments recent moves signal intent to address these constraints (through legal reforms) and aggressively scale up nuclear power (with an aspirational 100 GW by 2047 vision), aligning nuclear development with Indias long-term energy transition and net-zero 2070 goal.
India commits to 22.5 GW nuclear capacity by 2031.
INVESTMENT TRENDS IN THE NUCLEAR SECTOR
Global: Investment in nuclear energy has been rising amid renewed interest. In 2023, global nuclear power investment reached about USD 65 billion, nearly double the level a decade earlier. Much of this funding is led by government-backed utilities and state-owned companies, especially in Asia and Eastern Europe, as public financing remains crucial for large reactor projects. Private sector investment is growing cautiously, particularly in innovative technologies like small modular reactors. The IEA notes that long project timelines and cost overruns have historically made nuclear projects challenging for commercial lenders, pushing breakeven points 20 30 years out. To attract more private capital, new financing models and risk-mitigation tools are being explored for instance, long-term power purchase agreements, regulated asset base models, and even green bonds for nuclear projects. The emergence of SMRs is also seen as a game-changer: by dramatically lowering the up front cost per project and shortening construction times, SMRs could reach cash- flow breakeven up to 10 years earlier than traditional large reactors. This smaller, modular approach has sparked interest from investors and industries (e.g. data centers) planning about 25 GW of SMR capacity globally. Overall, the last few years have seen a cautious but notable uptick in nuclear sector investment driven by both public incentives and the promise of new technologies.
India: Nuclear power development in India has been predominantly funded by the government through the state-owned Nuclear Power Corporation of India (NPCIL) and related public sector enterprises. In recent years, India has increased budgetary allocations to nuclear energy to support new projects. For example, the 2023 and 2024 budgets provided capital for ongoing reactor construction and kick-starting the domestic SMR program. The announcement of federal funds for at least ve SMRs in 2025 illustrates this financial commitment to advanced nuclear technology. While foreign direct investment in Indian nuclear projects has been limited (due to the stringent liability law), India does benefit from external financing in specific cases notably, Russia extends credit for the Kudankulam reactors it is building in Tamil Nadu. Going forward, the proposed legal amendments to allow private sector participation could open Indias nuclear sector to domestic private investors and joint ventures. Some Indian public-sector companies have already taken minority stakes in nuclear projects (e.g. NPCIL partnered with other PSUs for financing PHWR projects), hinting at new investment models. In summary, Indias nuclear investment trend is one of steady public funding with an anticipated broadening of funding sources (domestic and international) as policies evolve to invite more players into the sector.
NEW NUCLEAR PLANT CONSTRUCTION AND EXPANSION PROJECTS
Global: After a lull in the 2010s, nuclear construction activity is rebounding. As of the end of 2024, 63 reactors totaling about 71
GW of capacity were under construction worldwide a significant expansion pipeline. The bulk of new builds are in Asia: about half of the global construction (by capacity) is in China alone, and three-quarters of projects are in emerging economies. In the last three years, multiple reactors have started up or entered the final stages of construction. Notably, Finlands Olkiluoto-3 reactor came online in 2022 2023, becoming Western Europes first new nuclear unit in 15 years. The United Arab Emirates connected its third Barakah reactor in 2023, continuing its rapid nuclear program. Several countries with no prior nuclear generation are building their first plants through international partnerships for instance, Turkeys Akkuyu-1 (a Russian-designed VVER) is expected to begin operation in 2024. China and India are commissioning new domestic-designed units as well. Each year from 2021 to 2023 saw a handful of grid connections, adding roughly 5 10 GW globally over the three-year span. Looking ahead, the IEA projects an additional 29 GW of nuclear capacity coming online worldwide between 2024 and 2026, which would boost annual nuclear output to record highs. Construction starts have also accelerated: since 2017, 52 reactors began construction (with designs predominantly from China or Russia), reflecting the shifting geography of nuclear growth. Overall, new nuclear build is gaining momentum, though primarily concentrated in a few key countries, and industry efforts are focused on streamlining construction timelines and avoiding past delays.
Worldwide, 63 new reactors (71 GW) are under construction as of 2024, indicating a revival of nuclear build projects. Most of these, like Turkeys Akkuyu plant pictured under construction, are in Asia and emerging markets, with strong backing from government-led programs. This global construction wave includes large Gen-III reactors and a growing number of small modular reactors in the pipeline.
India: India currently has 6 reactors ( 4.8 GW) under construction, which will significantly expand its nuclear capacity upon completion. These projects include four indigenous 700 MW PHWRs one at Kakrapar in Gujarat (Unit 4) and two at Rawatbhata, Rajasthan (Units 7 & 8), plus a second PHWR at Gorakhpur, Haryana as well as two large Russian-designed VVER-1000 reactors (Kudankulam Units 3 & 4) in TamilNadu. Construction on these units has been progressing over the past few years: for example, Kakrapar-4 and Rajasthan-7 are in advanced stages and expected to be operational by the mid-2020s. India is also working to expand the Kudankulam site with Units 5 & 6 (1000 MW each, Russian partnership) which began preliminary construction activities around 2021 2022. In addition, Indias long-delayed 500 MW Prototype Fast Breeder Reactor (PFBR) at Kalpakkam is nearing completion, potentially adding a new reactor technology to the mix. All these projects represent the first phase of Indias nuclear expansion plan. Looking forward, India has approved the construction of ten more 700 MW PHWRs in eet-mode and is negotiating new reactor projects with international partners (such as 6 EPR reactors with France at Jaitapur and AP1000 reactors with the USA at Kovvada). While those are still in planning stages, the past three years have seen groundwork and agreements put in place. In summary, Indias construction portfolio in the early 2020s consists of scaling up existing sites and technologies, which will roughly double its nuclear capacity in the coming decade if all projects proceed to completion.
CHANGES IN NUCLEAR ENERGYS SHARE OF THE TOTAL ENERGY MIX
Global: Nuclear energy currently provides about 9% of global electricity generation. This share has been relatively stable in the last few years but represents a decline from nuclears peak contribution (~17 18% of world electricity in the mid-1990s). Essentially, nuclear generation has grown in absolute terms, reaching 2,602 TWh in 2023, but overall power demand has grown faster, so nuclears slice of the pie has shrunk over time. Coal and natural gas still dominate global electricity (together ~58% in 2022), while renewables (wind, solar, hydro) are rapidly expanding their share. Nuclear remains the second-largest low-carbon electricity source after hydropower, generating about one-quarter of the worlds low-carbon electricity. Notably, nuclears share varies widely by country: France gets ~65 70% of its electricity from nuclear, the U.S. about 20%, and China around 5%. In emerging economies as a whole, nuclear accounted for just ~5% of power generation in 2023. The IEA expects nuclears global share to hold around 9 10% through the mid-2020s, as rising nuclear output roughly keeps pace with growing electricity needs. Any significant increase in nuclears share longer-term would require a much faster build rate to outstrip demand growth and the surge in renewables.
Nuclear energy currently provides about 9% of global electricity generation
India: Nuclear power constitutes only a small fraction of Indias energy mix. In 2023, nuclear plants generated about 48.2 TWh, which was roughly 2% of Indias total electricity generation. This share has remained low and relatively steady (in the 2 3% range) for many years. Despite the addition of new reactors, Indias overall power demand dominated by coal has grown so rapidly that nuclears percentage contribution has not risen substantially. Coal- red generation accounted for 75% of Indias 1958 TWh electricity in 2023, whereas all low-carbon sources combined (renewables, hydro, nuclear) were about 15%. The government aims to improve this balance by scaling up both renewables and nuclear. If India meets its stated nuclear capacity targets (22.5 GW by 2031 and further expansion beyond), nuclear energys share in the electricity mix would increase, but even doubling nuclear output would still yield only around 5% of the projected mid-2030s power demand. In terms of total primary energy (including fuels for transport, etc.), nuclear is even more modest (around 1% of Indias primary energy). However, its role is considered strategic for energy security and emissions reduction. The share of nuclear in Indias mix is expected to rise gradually over the next decades as new reactors come online, but in the near term (next 3 5 years) it will remain a minor component of the energy mix, on the order of just a few percent.
TECHNOLOGICAL ADVANCEMENTS AND SAFETY DEVELOPMENTS
Global: The past few years have seen notable technological progress in the nuclear field ,alongside a continued strong emphasis on safety. Small Modular Reactors (SMRs) have emerged as a focal point for innovation these are compact reactors (typically 50 300 MW each) with modular design and enhanced safety features. Many countries and companies are investing in SMR development, with several designs in licensing and rst-of-a-kind units expected before 2030. SMRs offer inherent safety advantages (such as passive cooling) and lower upfront costs, which have attracted interest for applications from electricity generation to powering remote sites. In terms of large reactors, new Generation III+ designs (e.g. Frances EPR, Russias VVER-1200, U.S. AP1000) are being deployed, each incorporating improved safety systems like core catchers, passive emergency cooling, and hardened containment. The global nuclear industry has also been advancing fuel technology for instance, development of accident-tolerant fuels that can better withstand loss-of-coolant events and exploring fusion energy, though fusion remains experimental. On the safety front, operational performance of nuclear plants globally has been strong over the last three years, with high availability and no major incidents. Regulatory bodies have implemented lessons from the 2011 Fukushima accident to ensure robust safety margins. Many countries have extended the lifespans of reactors after thorough safety reviews and upgrades (e.g. retro tting backup power and cooling systems).
The IEA highlights that lifetime extensions of existing plants are one of the most cost-effective sources of low-emission electricity, provided that stringent safety standards are maintained. International cooperation on nuclear safety continues under the guidance of the IAEA for example, sharing best practices for plant resilience and emergency preparedness. In summary, current technological trends (like SMRs and next-gen reactors) aim to make nuclear power safer, more exible, and more cost-effective, while the industrys safety record over the past few years has remained strong, reinforcing con dence in the continued operation and new deployment of nuclear plants.
India: Indias nuclear program has pursued several technological innovations unique to its resources and needs, while maintaining a solid safety record. Technologically, India is notable for its focus on the indigenous PHWR design and the thorium fuel cycle. Indian 220 MW and 540/700 MW PHWRs have been continuously improved over time the latest 700 MW units feature upgraded safety systems and higher ef ciency. India is also on the verge of commissioning a Prototype Fast Breeder Reactor (PFBR), which will breed plutonium fuel and eventually utilize thorium, aligning with Indias three-stage nuclear strategy to tap its abundant thorium reserves. In the past three years, India has increased R&D into small modular reactors as well: the Bharat SMR initiative (announced 2023) aims to develop a 220 MW modular PHWR-based reactor with advanced safety and load-following capabilities. On the safety front, Indias nuclear plants operate under the Atomic Energy Regulatory Board (AERB), an independent regulator that enforces rigorous safety standards. After the Fukushima accident (2011), India promptly conducted comprehensive safety reviews of all its reactors and implemented additional safety upgrades (for instance, enhanced ood protection at coastal plants and backup cooling arrangements). These upgrades, along with periodic safety drills and international peer reviews, have strengthened the resilience of Indian reactors. Over the last few years, NPCIL has also been preparing to extend the life of older reactors (such as the Tarapur units) with refurbishment and safety retro ts. Notably, India has had no serious nuclear power plant incidents in its operating history, underlining a consistent safety performance. As the country moves to build more reactors, it is also updating its regulatory framework the government in 2021 proposed establishing a Nuclear Safety Council chaired by the Prime Minister to oversee all nuclear safety matters, indicating top-level attention to safety governance. In conclusion, India is advancing its nuclear technology portfolio (from fast breeders to SMRs) and continues to upgrade safety measures, ensuring that growth in nuclear capacity is accompanied by robust safety management.
Government Initiatives and International Collaborations in Nuclear Energy
Global: International collaboration has been a cornerstone of recent nuclear energy developments. In the wake of growing interest, countries and organizations have launched joint initiatives to promote nuclear power. One high-pro le example is a global partnership aiming to triple worldwide nuclear capacity by 2050, which has garnered support from over 40 countries as part of broader clean energy cooperation. Multilateral forums like the Clean Energy Ministerial and Generation IV International Forum bring together governments to coordinate on nuclear innovation, safety standards, and financing mechanisms. There is also significant technology transfer and project collaboration happening bilaterally: Russia and China have been exporting their reactor technologies through government-backed deals, while Western firms (with home government support) are engaging new markets in Eastern Europe, Africa, and Asia. For instance, Russias Rosatom is constructing nuclear plants in Belarus, Bangladesh, Turkey and more, often under state agreements that include training and fuel supply. The U.S., France, and South Korea are actively working with countries like Poland, Czechia, and Saudi Arabia on new reactor projects. These collaborations help countries without a nuclear legacy to build capacity and regulatory know-how. Another aspect of international cooperation is seen in nuclear safety and waste management: the IAEA coordinates safety peer reviews, and initiatives like the Joint Convention on Spent Fuel Management facilitate shared solutions for nuclear waste. In the last three years, amid energy security concerns, groups of nations have explicitly endorsed nuclear energys role for example, the G7 in 2022 emphasized support for nuclear investment and supply chain cooperation. Overall, government-led initiatives (national and international) are creating an environment where knowledge, financing, and confidence in nuclear power can be shared across borders. The net effect is a more interconnected global nuclear community working toward common goals of safe and sustainable nuclear energy expansion.
India: Indias nuclear energy programme has greatly benefited from government initiatives and international collaboration, especially recently. Domestically, strong government commitment is evident in high-level missions like Viksit Bharat, which integrates nuclear expansion into national development plans. The Indian government has also fostered partnerships between its nuclear agencies (DAE, NPCIL) and other state-run companies to pool expertise and resources for new projects. Internationally, India engages in several collaborative fronts. In February 2025, India and France signed a Letter of Intent to cooperate on advanced nuclear reactors, including modular and small reactors. This builds on the ongoing dialogue to install six French EPR reactors at the Jaitapur site one of the largest prospective India-foreign nuclear deals. Similarly, India and the United States agreed in 2023 to advance the long-pending US-India Civil Nuclear Agreement by moving forward on building U.S.-designed reactors in India. This could see U.S. firms like Westinghouse deploy reactors (e.g. AP1000s) in India with both governments support. Russia has been Indias most significant nuclear collaborator for decades: the Kudankulam plant (units 1&2 operational, 4 more underway) is being built with Russian technology and nancing, under an intergovernmental agreement. India also works with other nations on fuel supply and research for example, sourcing uranium from countries like Kazakhstan and Canada through long-term contracts, and partnering in international research projects (India is a partner in the ITER fusion project in France). On the safety and regulatory side, India cooperates with the IAEA and participates in global safety conventions, benefitting from international best practices. In summary, the last few years have seen India deepen its nuclear ties with major powers (USA, France, Russia) to access technology and expertise, while government initiatives at home are paving the way for a larger role of nuclear power in Indias energy future. These collaborations and proactive policies are crucial for India to achieve its ambitious nuclear targets and ensure the nuclear sectors growth is safe, secure, and sustainable.
Sources:
International Energy Agency (IEA) reports and data iea.org
World Nuclear Association and World Nuclear News world-nuclear.org
GLOBAL TRANSFORMER MARKET ANALYSIS
MARKET SIZE, GROWTH TRENDS, AND SEGMENTATION
The global transformers market is experiencing healthy growth, underpinned by rising electricity demand, grid expansion, and replacement of aging infrastructure. In 2023, the global transformer industry (including power and distribution transformers of various ratings) was valued at approximately USD 54.5 billion. Despite economic uncertainties, the market expanded to around USD 57.8 billion in 2024, and is projected to continue on an upward trajectory over the coming decade. Industry forecasts anticipate a compound annual growth rate (CAGR) of roughly 6% 7% globally. For example, one analysis forecasts the transformers market to grow at a CAGR of 6.25% from 2024 through 2030, reaching about USD 83.4 billion by 2030. Extrapolating this trend further to 2032 suggests a global market well above USD 90 billion in value. This growth rate outpaces projected global GDP growth, reflecting the robust capital investment in electrical infrastructure worldwide. Key drivers include expansion of power generation capacities (especially renewables), new transmission and distribution (T&D) networks, and upgrades to smarter, more efficient grids. (globenewswire.com)
Transformers market to grow at a CAGR of 6.25% from 2024 through 2030
ENERGY SECTOR DRIVING FACTORS PROJECTIONS:
| Driving Factors | Year | Anticipated Valuation | Anticipated |
| (In USD billion) | Growth | ||
| Hydrogen Market | 2030 | 410 bn | 7.80% |
| Geo thermal energy market | 2028 | 9.2 bn | 5.90% |
| Dry type transformer market | 2028 | 9.2 bn | 6.80% |
| Power Transformer Market | 2029 | 37.7 bn | 6.20% |
| Fuel cell market | 2028 | 8.7 bn | 21.70% |
| Offshore wind market | 2028 | 56.8 bn | 12.30% |
| Small modular reactors market | 2030 | 7.14 bn | 3.00% |
| Smart meter market | 2030 | 46.14 bn | 9.80% |
| Hybrid power solution market | 2028 | 4 bn | 10.40% |
| Energy as a service | 2030 | 100.34 bn | 11.60% |
| Carbon-credit trading platform | 2030 | 1602.7 bn | 31.00% |
| Transformer oil market | 2028 | 3000 mn | 5.90% |
| Electrical Bushings Market | 2029 | 4.77 bn | 5.40% |
| Electrolysers market | 2030 | 78.01 bn | 65.90% |
| Inverter market | 2028 | 39.60 bn | 16.00% |
| Residential energy storage market | 2030 | 4.58 bn | 9.30% |
| Hydrogen storage tank and transportation market | 2030 | 4.4 bn | 52.40% |
| Carbon footprint management market | 2028 | 30.8 bn | 22.20% |
| Oil immersed power transformer market | 2028 | 28.3 bn | 6.00% |
| Switch gear market | 2028 | 119.9 bn | 5.20% |
| hydrogen energy storage market | 2028 | 196.8 bn | 76.80% |
| Renewable energy market | 2028 | 28.2 bn | 20.00% |
| Nuclear Power Market | 2029 | 44.71 bn | 2.90% |
Regional dynamics play a significant role in the market. Asia-Pacific is the largest and fastest-growing region for transformers, fuelled by massive grid build-outs in China and India and continued electrification across Southeast Asia. Three of the top ve countries for infrastructure investment needs are in Asia (China, India, Japan), together representing about 39% of global infrastructure demand this translates into enormous demand for transformers and grid equipment. Indias grid expansion and rural electrification drive similarly contribute to APACs dominance. In value terms, Asia-Pacific likely comprises over 40% of the global transformer market. North America and Europe are mature markets focusing on replacement of aging transformers (many over 40-50 years old) and enhancements for reliability and resiliency. The U.S., for instance, has number of older distribution transformers nearing end-of-life, spurring steady retro t demand. North America is also investing in grid hardening and accommodating distributed energy resources, which support demand for both large power transformers and smaller units. Europe is integrating renewable generation at a rapid pace (especially wind and solar), which necessitates new transformers for interconnections and system balancing, in addition to cross-border interconnectors that require very high voltage transformers. Middle East and Africa represent a growth frontier the Middle Easts investments in new power plants and grid interconnections (driven by economic development and often high peak demand due to cooling needs) are generating sizable orders for power transformers. Africa, while currently a smaller market, has vast electrification needs: as countries add generation capacity and extend grids to serve underserved populations, demand for distribution transformers in Africa is expected to climb significantly through 2030. Latin America sees moderate growth, with Brazil and Mexico leading investments in grid expansions and renewables integration. (Markets&markets)
INDIAN TRANSFORMER MARKETANALYSIS
OVERVIEW,SIE,AND GROWTH DRIVERS
The India transformer market is experiencing significant growth driven by a combination of expanding infrastructure, increasing industrial activity, and evolving energy requirements. Transformers, essential components in power generation, transmission, and distribution, are critical for ensuring the efficient and reliable delivery of electricity across the country. The market is segmented into various types, including power transformers, distribution transformers, instrument transformers, and specialty transformers, each catering to different applications and needs. Key drivers of the market include the rapid expansion of the electrical grid to support Indias burgeoning industrial base and the rising demand for electricity driven by urbanization and economic development. Government initiatives such as the Make in India campaign and investments in grid modernization are further fuelling growth. The focus on smart grid technology, renewable energy integration, and infrastructure upgrades is creating opportunities for advanced transformer technologies that enhance efficiency and reliability.
The utility segment remains a cornerstone of the market, with significant investments in power grid infrastructure and modernization projects. High-capacity power transformers are in demand to support large-scale projects, while the increasing penetration of renewable energy sources necessitates transformers designed for effective grid integration. Additionally, government programs like the Smart Cities Mission and rural electrification are boosting demand across various sectors. The market also faces challenges such as the need to reduce power losses and maintain grid stability. Transformers with advanced features, such as on-load tap changers (OLTC) and improved cooling technologies, are essential in addressing these issues. Despite the low threat from direct substitutes, technological advancements in energy storage and decentralized power generation are influencing market dynamics.
The Indian transformer market is worth USD 5.1 billion
The Indian transformer market is projected to reach USD 7.44 billion by 2029, with a 7.9% CAGR from 2024.
India is one of the most dynamic and fast-growing transformer markets in the world, driven by the countrys ambitious expansion and modernization of its power sector. As of 2024, the Indian transformer market is valued around USD 5.1 billion and is set on a steep growth trajectory. Are cent forecast projects that the market will reach USD 7.44 billion by 2029,growing at a CAGR of 7.9% from 2024 to 2029. This growth rate is higher than the global average, reflecting Indias stage of development there is significant new demand from electrification and capacity addition, on top of replacement needs. If we extend the outlook slightly further, by 2032 the Indian market could potentially approach or exceed USD 9 10 billion in annual value, assuming the momentum continues .Indias share of the global transformer market is increasing, supported by both robust domestic consumption and rising exports.
YEAR WISE TRANSFORMER DEMAND UPTO 2029-30
| Year | 765 kV | 400 kV | 220 kV | Total number of Transformer |
Total Capacity in MVA |
||||||||
Type of Transformer Rating in MVA |
Single Phase | Single Phase | Single Phase | Single Phase | Single Phase | Single Phase | Total | Three Phase | Three Phase | Three Phase | Total | ||
| 500 | 167 | 105 | 500 | 315 | 200 | 200 | 160 | 100 | |||||
| % Share assumed | 100 | 2 | 1 | 15 | 80 | 2 | 100 | 10 | 80 | 10 | 100 | ||
| 2023-24 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2024-25 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2025-26 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2026-27 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2027-28 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2028-29 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
| 2029-30 | 107 | 5 | 4 | 13 | 113 | 4 | 139 | 10 | 104 | 21 | 135 | 381 | 118390 |
Additionally, the HVDC projects require at least 40 GVA of converter transformer capacity by 2030.
YEAR WISE REACTOR DEMAND UPTO 2029-30
| Year | 765 kV | 400 kV | Total number of Reactors | Total MVAR Capacity | ||||||
| Type of Transformer | Single Phase | Single Phase | Total | Three Phase | Three Phase | Three Phase | Three Phase | Total | ||
| Rating in MVA | 110 | 80 | 100 | 125 | 80 | 63 | 50 | |||
| % Share assumed | 50 | 50 | 100 | 50 | 45 | 4 | 1 | 100 | ||
| 2023-24 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2024-25 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2025-26 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2026-27 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2027-28 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2028-29 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
| 2029-30 | 64 | 87 | 151 | 17 | 23 | 3 | 1 | 44 | 195 | 18204 |
Source: CEA Distribution Perspective Plan 2030
KEY GROWTH DRIVERS IN INDIA INCLUDE:
- Government Regulatory Environment and Infrastructure Development:
Government initiatives such as the Energy Conservation Act (2002), Minimum Energy Performance Standards (MEPS), and Bureau of Energy Efficiencys (BEE) standards and labeling programs significantly influence the market by mandating energy-efficient transformer production. The Perform, Achieve, and Trade (PAT) scheme incentivizes energy efficiency among large industries, directly influencing transformer market growth through the adoption of energy-efficient designs. Infrastructure projects like the Smart Cities Mission, Green Energy Corridor, and electric vehicle infrastructure under FAME-II generate substantial demand for innovative transformers, especially smart transformers that optimize energy consumption and enhance grid reliability.
- Soaring Electricity Demand: Indias electricity demand has been steadily rising due to population growth, urbanization, and industrial expansion. Even with substantial additions in generation, per capita consumption is still well below the global average, implying room for further growth. The push to provide reliable 24x7 power to all citizens and the electrification of new villages/towns ensure continuous demand for distribution transformers. Additionally, government schemes like housing for all, rural electrification (e.g., programs like Saubhagya which achieved near-universal household electrification), and railway electrification all contribute to more transformer installations at the last-mile
- Expansion and Modernization of Power Infrastructure:
Indias power grid is undergoing rapid expansion. The country had an installed generation capacity of~442 GW in FY2024 and plans to scale this up to 900 GW by FY2032, which is an enormous increase. Achieving this will require commensurate expansion in transmission and distribution networks .The Central Electricity Authority (CEA) of India has laid out transmission plans including thousands of circuit kilometers of new high-voltage lines and hundreds of new substations. Notably, the addition of 12,000+ new substations with over 141,000 MVA capacity is planned from 2022 to 2030,representing a ~29% increase in substation capacity. Each of these substations will utilize multiple transformers. Furthermore, existing infrastructure is being upgraded old transformers are being replaced with higher capacity or more efficient ones to reduce technical losses. The emphasis on grid modernization is evident in programs like the Revamped Distribution Sector Scheme (RDSS), which allocates billions of dollars to strengthen distribution networks, including transformer augmentation and installing new high-efficiency transformers to cut losses. All these initiatives contribute to sustained demand.
Indias power generation capacity is 442 GW (FY2024) and aims to reach 900 GW by FY2032.
| AN 25 Installed transmission line (cKM) | |||
| Length of Transmission Line in India | Central Transmission Line | State Transmission Line | JV/Private Transmission Line |
| 491,871 | 184,976 | 264,085 | 42,810 |
| Planned progress of transmission line in country (2022-27) (cKM) | |||
| Central Transmission Lines | State Transmission Line | JV/Private Transmission Line | |
| 222Kv | 14,352 | 192,200 | 3,429 |
| 400Kv Central Line | 113,383 | 67,535 | 25,264 |
| 500Kv | 5,948 | 1,504 | 1,980 |
| 765Kv | 41,350 | 2,846 | 12,137 |
| 800Kv | 9,655 | ||
Source: CEAJan 2025 Report
- Metro Rail Network Expansion: Indias rapid urbanization and demand for sustainable public transportation offer significant opportunities through ongoing metro rail expansions. Metro-specific transformers must exhibit compact designs, high reliability, and robust re safety, particularly favoring dry-type transformers in urban underground segments. Projects such as Delhi and Mumbai Metro illustrate successful transformer technology adoption tailored to metro operational needs. Strategic collaborations, technological partnerships, and local manufacturing incentivized by government policies such as "Make in India" enable manufacturers to capitalize on this sector.
- Rural Electrification: Government initiatives like Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Saubhagya Scheme promote widespread rural electri cation, significantly driving transformer demand. Decentralized solar-powered grids necessitate numerous smaller transformers (up to 10 MVA), emphasizing cost-effectiveness, reliability, and resilience. Innovations addressing logistical, environmental, and operational constraints ensure that manufacturers are strategically positioned to benefit from increasing rural electrification projects, backed by substantial government budgets and incentives for local manufacturing.
- Smart Grid Adoption: The accelerated adoption of smart grids and associated technologies such as smart transformers creates substantial market opportunities. Smart transformers equipped with sensors offer real-time monitoring and proactive maintenance, significantly improving grid reliability and efficiency. Initiatives like the National Smart Grid Mission (NSGM) and Power Grid Corporations pilot projects highlight growing demand for integrated smart transformer solutions. Successful pilot implementations in Telangana, Assam, and West Bengal reflect promising prospects for market expansion driven by smart grid integration.
- Renewable Energy Integration: India has set aggressive renewable energy targets (500 GW of non-fossil fuel capacity by 2030, including 280 GW solar and 140 GW wind).This energy transition is a major demand driver for transformers. Solar farms, wind farms, and associated transmission lines (like the Green Energy Corridors) require a wide range of transformers: inverter duty transformers at solar plants, generator step-up transformers for wind farm pooling stations, and high-voltage transformers for transmitting renewable power to load centers. The intermittent nature of renewables is also prompting investment in grid stability and control equipment, including phase-shifting transformers and STATCOMs (which involve transformer components). The ambitious renewable targets and the need to integrate these into the grid are driving transformer market growth in India For example, every large solar park (hundreds of MW) will involve dozens of medium power transformers and potentially a few large ones to connect to the interstate grid. Thus, renewable expansion multiplies transformer demand beyond traditional needs.
- Urbanization and Industrialization: Rapid urban development in India means new cities, metro rails ,data centers, and industrial parks each of which contributes to transformer demand. Urban load growth requires new substations and upgrading distribution transformers to handle higher densities. The rise of data centers (driven by the digital economy) is a recent factor; these energy-intensive facilities require dedicated high-capacity transformers and backup units. Similarly, expansion of industries (steel, cement, petrochem, manufacturing) drives demand for both distribution transformers within plants and power transformers feeding industrial clusters. Growing urbanization and industrial load has been cited as a primary reason for increased transformer uptake in India. In summary, Indias transformer market growth is fuelled by its overall development journey electrification, capacity addition, and infrastructure upgrades. The country is effectively a case study of emerging economy power sector growth, where both the grid is expanding to new areas and getting denser/stronger in existing areas. This dual growth (expansion + upgrade) translates into one of the highest growth rates for transformers globally.
KEY POLICY INITIATIVES AND THEIR INFLUENCE
Renewable Energy and Power Infrastructure:
- India added 15 GW of renewable energy capacity (April November 2024), nearly double the 7.57 GW in the same period last year.(Source: PIB)
- Total renewable energy capacity reached 203.18 GW in October 2024,a significant 13.5% annual growth (up from 178.98 GW in Oct 2023).(Source: PIB)
- Indias total installed power capacity increased by 7.2% YoY, reaching 456.7 GW by November 2024.(Source: PIB)
- Government plans to expand the transmission network from 4.85 lakh circuit km (2024) to 6.48 lakh circuit km by 2032 under the National Electricity Plan (2023 2032).(Source: PIB)
Key Renewable Energy Initiatives:
- PM-KUSUM Scheme, Solar Rooftop Phase II, and 12,000 MW CPSU Scheme Phase II launched for clean energy promotion. (Source: PIB)
- The Cabinet approved 7,453 crore Viability Gap Funding (VGF) for Indias first offshore wind project ,including 6,853 crore for 1 GW offshore capacity and 600 crore for port upgrades.(Source: PIB)
- Pradhan Mantri Surya Ghar Muft Bijli Yojana (2024) installed 7 lakh rooftop solar systems within 10 months of its launch.(Source: PIB)
Railway Electrification and Freight Infrastructure:
- The Eastern Dedicated Freight Corridor (EDFC) was fully completed by February 2024, with 90% operational as of April 2024, handling 300 trains daily.(Source: Wikipedia)
- Indian Railways allocated over $22 billion (FY2024 25) towards modernization and safety upgrades.(Source: Reuters)
- Railway modernization budget for 2025 26 expected to reach 2.9 3.0 trillion.(Source: Reuters)
- Multiple new Dedicated Freight Corridors planned, along with Multi Modal Logistics Parks and Freight Cargo Terminals.(Source: Economic Times)
Urbanization and Industrial Corridors:
-12 new industrial parks approved under the National Industrial Corridor Development Programme, emphasizing sustainability and job creation.(Source: Economic Times)
-Government prioritizing world-class infrastructure in Smart Cities and industrial corridors through advanced technologies and high-speed communications.(Source: PIB)
Signi cant Energy Sector Goals and Investments:
-India aims to integrate a record 35 GW solar and wind energy into the grid by March 2025, supported by a financial commitment of $386 billion. (Source: Reuters)
-Government inviting bids for 6,000 MW renewable energy with storage solutions to manage peak-hour demand, supporting the 500 GW non-fossil fuel target by 2030. (Source: Reuters)
- From June 2026, all clean energy projects must use domestically produced solar PV modules to reduce dependence on imports. (Source: Reuters)
- India committed over $2 billion towards nuclear energy research to boost electricity production and reduce emissions. (Source: AP News)
Additional Infrastructure Initiatives:
- FY 2023 24 saw substantial budget allocations to urban infrastructure aimed at reducing traf c congestion through new roads, bridges, and metro rail expansions. (Source: ET Government)
Global Leadership:
- India recognized globally as a renewable energy leader, setting ambitious targets and strategies for other nations to follow. (Source: Reuters)
UNION BUDGET 2025-26: SECTOR-WISE ANALYSIS OF KEY ALLOCATIONS AND GROWTH OPPORTUNITIES
FOR TRANSFORMER INDUSTRY
The Union Budget 2025-26 focuses on boosting consumption, increasing capital expenditure (Capex), and investing in power, railways, infrastructure, and renewable energy.
The government has increased effective capital expenditure (Capex) by 11% YoY to 15.5 trillion for FY26, with 11.2 trillion funded through budgetary support and 4.3 trillion from internal and extra-budgetary resources (IEBR). This investment aims to accelerate industrial growth, engineering rms, and large EPC players, ensuring steady demand for machinery, heavy equipment and construction materials,
A key structural reform in this budget is the requirement for each infrastructure-related ministry to present a three-year project pipeline for Public-Private Partnership (PPP) projects, ensuring better long-term planning. Additionally, the government has allocated 1.5 trillion in interest-free 50-year loans to states to support infrastructure development.
| Key Infrastructure Initiatives are highlighted below: | |
| Metro Rail Expansion | 312 billion (+26% YoY) |
| Nuclear Power Projects | 21 billion (+33% YoY) |
| River Interlinking Projects | 24 billion (+20% YoY) |
| PM Awas Yojana (Affordable Housing) | 548 billion (+69% YoY) |
| Aircraft & Aero Engines Procurement | 486 billion |
| Asset Monetization Drive | 10 trillion for new projects |
| Green eld Airports in Bihar | To boost regional connectivity |
| and construction growth |
| Sectorial Insights: | |
| Sector | Key Budgetary Allocation |
| Power Transmission | 9.15 lakh crore for grid expansion |
| & Distribution | |
| Nuclear Energy | 100 GW capacity by 2047 |
| Railways | 2.7 Trillion capex with priority on track |
| expansion and electri cation | |
| Infrastructure | 1.5 lakh crore interest free loans to states |
| Renewable Energy | 19,100 crore (+143% YoY), |
| 19,744 crore for Green Hydrogen | |
| PLI | 0.5 % Of GSDP additional borrowing to |
| states who adhere these reforms |
The Union Budget 2025-26 places a strong emphasis on power transmission expansion, distribution reforms, and nuclear energy development, ensuring the stability and ef ciency of Indias growing electricity demand. The government has outlined plans to increase Indias peak power demand handling capacity to 458 GW by 2032, which will require expanding the transmission network from 4.85 lakh circuit km to 6.48 lakh circuit km. The government has also approved 50 GW of inter-state transmission system (ISTS) capacity to evacuate 280 GW of renewable energy by 2030, reinforcing Indias commitment to clean energy.
The transmission network will require expansion from 4.85 lakh to 6.48 lakh circuit km.
The budget provides incentives for states to undertake distribution and intra-state transmission reforms by offering an additional borrowing limit of 0.5% of their Gross State Domestic Product (GSDP) if they adhere to these initiatives.
On the nuclear energy front, India has set a long-term target of achieving 100 GW of nuclear energy capacity by 2047, with an expected 9% CAGR growth in nuclear power capacity until 2030, followed by a 12% CAGR from 2032 to 2047. The 20,000 crore allocation for Small Modular Reactors (SMRs) will support the deployment of ve indigenous nuclear reactors by 2033, with expected amendments to the Atomic Energy Act to allow private sector participation. Nuclear energy projects have received 21 billion (+33% YoY) Additionally, the PM Surya Ghar Muft Bijli Yojana allocation has increased from 110 billion to 120 billion, reinforcing Indias solar rooftop trajectory.
RAILWAY SECTOR
The railway sector has received a 2.7 trillion Capex allocation. While track expansion and electrification projects remain a priority, the government has focused more on metro development, high-speed rail corridors, and rolling stock modernization. 312 billion (+26% YoY) allocated for metro rail projects. A key area of focus remains the expansion of the Vande Bharat train network, with a target of 400 new
trains to be operational by March 2027.
INFRASTRUCTURE & CAPEX GROWTH
The Union Budget 2025-26 emphasizes urban and industrial infrastructure, MSME support, and transportation electrification, significantly impacting the transformer industry. The Urban
Challenge Fund (1 lakh crore) supports smart city projects, focusing on energy-ef cient power distribution, driving demand
for advanced transformers. PPP initiatives aim to attract private investment for grid expansion and modernization, while EV charging incentives will boost transformer demand for charging networks.
The National Manufacturing Mission promotes local production of electrical equipment, including transformers, reducing import dependence. A 10,000 crore MSME fund will aid capacity expansion and energy-efficient design adoption.
RENEWABLE ENERGY
The Ministry of New & Renewable Energy (MNRE) has received
19,100 crores, marking a 143% increase YoY, reflecting Indias aggressive renewable energy push. The focus is on solar PV
manufacturing, wind energy expansion, and battery storage solutions. The National Green Hydrogen Mission has also
received a 19,744 crore outlay, boosting hydrogen-based energy adoption.
CAPITAL GOODS & INDUSTRIAL MANUFACTURING
The budget provides strong support for industrial expansion, with key measures including:
- Production-Linked Incentives (PLI) Schemes: 166 billion (+84% YoY)
- Semiconductor & Display Manufacturing: 70 billion (+83% YoY)
- Higher Capex in Power PSUs to drive transformer and heavy machinery demand.
The increase in PLI-related incentives will benefit capital goods and industrial automation companies, driving growth in domestic manufacturing and reducing import dependence.
KEYTAKEAWAYS & SECTORALIMPACT
The Union Budget 2025-26 successfully balances short-term economic stimulus with long-term infrastructure and power sector investments.
Key beneficiaries include power transmission companies, nuclear energy developers, infrastructure firms ,renewable energy players.
The increased focus on power transmission, metro expansion, and renewable energy will significantly benefit the transformer manufacturing industry. With the planned transmission network expansion demand for EHV and Reactor Transformers will rise to support high-voltage applications. Power Sector and Capital Goods Industry is well poised to capitalize on the rising demand with its presence in niche product range .The railway sectors expansion plan will positively impact demand for V-connect and STATCOM transformers to ensure efficient electrification .The renewable energy push, will spur demand for specialised Inverter Duty Transformers used in solar power projects and Rectifier Transformer for Hydrogen Generation.
EHVTRANSFORMERS EXPANDING ULTRA-HIGH VOLTAGE TRANSMISSION NETWORKS
Extra High Voltage (EHV) transformers generally refer to transformers operating at the upper end of high voltage, typically considered above 230 kV, including 400 kV, 765 kV, and extending to Ultra High Voltage (UHV) levels of800 kV,1100 kVAC (and corresponding high voltages in DC systems like ?500 kV, ?800 kV HVDC converter transformers). These transformers are crucial for long-distance transmission ofbulk power with minimal losses. They are used in step-up roles at large generation switchyards and step-down roles at transmission grid substations.
The growth of EHV transformer demand is tied to the build-out of high-voltage transmission infrastructure worldwide. As electricity demand grows and generation becomes more geographically dispersed (e.g., renewables often far from load centers),countries are investing in higher voltage levels to move power efficiently. Key drivers include:
- New Transmission Lines to Connect Renewables: Many countries are constructing transmission “backbones” to transport wind and solar power from resource-rich regions to consumption centers. For instance ,China has built an extensive network of UHV lines (both AC and DC) to transmit power from the west (where many renewables and coal bases are) to the east coast cities. Each UHV line requires multiple large EHV/UHV transformers or converter transformers at terminals .India, similarly ,is expanding its 765 kV AC network and ?800 kV HVDC lines to carry power from central/eastern regions and solar parks to other parts of the country. The expansion of765 kV in India and 800+ kV in China is a major source of demand for the highest-rated transformers.
- Regional Interconnections: Theres a trend of interconnecting national grids into larger synchronous areas or via HVDC links (e.g., cross-Europe interconnectors ,ASEAN Power Grid plans, African power pools). When countries interconnect, of ten new high-voltage stations are built at the borders, requiring EHV transformers to manage the interchange.
- Urban Grid Strengthening: Mega-cities are drawing more power and often require EHV substations at their peripheries to step-down from the transmission super grid to the sub-transmission level .For example, metropolitan areas in China and India now have 400 kV/765 kVclass substations feeding into the urban distribution network. These use large auto-transformers or inter-tie transformers.
- Replacement of Aging EHV Equipment: Regions like North America and Europe, which deployed a lot of their 400 kV/500 kV infrastructure in the 1960s-80s,are now encountering end-of-life replacements Even if net new lines arent as many ,the replacement market for old EHV transformers is significant. Utilities are upgrading old 345 kV or 500 kV units with modern ones that often have higher capacity or better performance.
According to market research, the EHV& UHV transformer market (above 330 kV) is expected to grow at about 5% CAGR from 2024 to 2032,rising from ~$7.2 billion in 2024 to ~$10.7 billion in 2032. This indicates a steady increase, aligning with ongoing grid projects. Although as a share of total transformer market, EHVis smaller, its technologically and financially significant due to high unit costs.
The EHV & UHV transformer market is expected to grow at 5% CAGR from 2024 to 2032.
Geographically, Asia- Pacific again leads. India is one of the most active markets for new EHV transformers at 400 kV and 765 kV, as well as planning ?800 kVHVDC. For instance, Indias national grid development through 2027 includes numerous 765 kV substations; beyond 2027,even 1200 kVUHVAC (tested but not yet deployed) could eventually be revisited, which would spawn demand for that class of transformers. Other countries in Asia like Pakistan, Bangladesh, Indonesia, Vietnam are moving from 220 kV up to 400 kV systems, thus needing their first batches of EHV transformers. The Middle East too has examples: Saudi Arabia and others moving to 400 kV networks from 132 kV; Egypt, which traditionally was 220 kV, is installing 500 kV lines now, hence ordering 500 kV transformers.
Europe and North America: In Europe,400 kVis standard; some Eastern European countries are still beeing up their 400 kV network. Additionally, Europe is building HVDC links (like those connecting offshore wind or interconnecting countries undersea) these require HVDC converter transformers (technically part of the EHV transformer market). With offshore wind booming (UK, Germany, China, etc.),theres a niche demand for large offshore platform transformers and onshore converters. North America hasnt built new super-high-voltage AC recently (500 kV is the max in US, 735 kV in Canada which was done decades ago), but it is investing in HVDC for long distances (several HVDC projects in planning in the US Midwest for wind, for example).So converter transformers for ?500 kV and ?600 kVHVDC might see a bump in the US. Plus, as mentioned, many 500 kV transformers in the US West (from 1970s) are due for replacement/upgrades.
One key aspect is technological complexity and supply: EHV/UHV transformers are among the most complex to design and manufacture. Fewer companies globally can produce the highest ratings reliably due to design know-how, large factory infrastructure (for handling extremely heavy units), and testing capability. Traditionally, European, Japanese, and North American manufacturers led this segment. But in the last 15 years, Chinese and Indian manufacturers have caught up significantly for domestic needs. For instance, Chinese firms like TBEA,XD, etc., manufacture 1000 kV class transformers; Indias Transformers & Rectifiers (India) Limited & BHEL made a 1200 kV prototype and routinely makes 765 kV now. The high demand in Asia is thus often fulfilled by local manufacturers (with some technology licensing as needed).Western manufacturers still play in global tenders for HVDC projects and such, but increasingly local content requirements in many countries mean local manufacturing of EHV transformers (often via joint ventures or subsidiaries).
OUTLOOK: The EHV transformer segment will grow as long as countries keep investing in stronger grids, which is expected to continue at least through the 2020s. The impetus to reduce transmission losses and improve grid stability (especially under the variability of renewables) actually encourages higher voltage levels and more interconnections. Innovations in this space include things like split transformers for easier transport (since moving a 500 MVA 765 kV transformer can be challenging, sometimes theyre made in halves),better insulating materials (to manage the enormous electrical stresses),and online monitoring because failure of these units can be catastrophic for grid operations. Utilities are willing to invest in high-quality EHV transformers since reliability is paramount.
In summary, EHV and UHV transformers form the backbone of emerging “supergrids” and bulk power highways. As countries aim to transmit larger blocks of power over longer distances be it to connect remote renewables, integrate regional grids, or supply mega-cities the need for these transformers grows. This segment, though not as large in unit count as distribution transformers, commands significant investment and represents the cutting edge of transformer engineering. The expansion of ultra-high-voltage networks across Asia and other regions ensures that EHV/UHV transformer demand will remain strong through 2032 and beyond, making it a key pillar of the transformer industrys future.
Detailed Statistical Analysis
To provide a quantitative perspective, this section presents
projections and trends in tabular and graphical form for the transformer industry from 2024 through 2032.The data encapsulate market size growth, segment-wise CAGRs, and other relevant statistics derived from industry reports and the foregoing analysis.
Global Transformer Market Size Projections (2024 2032)
The table below illustrates the estimated global transformer market size for each year 2024 through 2032. It assumes a compound annual growth rate in the mid-6% range (consistent with market forecasts starting from a 2024 base value of roughly $57.8 billion.
All gures are in USD billions.
| Year | Estimated Market Size | Year-over- |
| (USD Bn) | Year Growth (%) | |
| 2024 | 57.8 | (base year) |
| 2025 | 61.4 | 6.2% |
| 2026 | 65.2 | 6.2% |
| 2027 | 69.3 | 6.3% |
| 2028 | 73.6 | 6.2% |
| 2029 | 78.2 | 6.3% |
| 2030 | 83.4 | 6.7% |
| 2031 | 88.3 | 5.9% |
| 2032 | 94.0 | 6.5% |
Sources: Derived from Research And Markets and other industry forecasts. 2024 is estimated at $57.75B, growing to ~$83B by 2030. Minor extrapolation applied for 2031 2032.(globenewswire.com)
In the above projection, the global market nearly doubles from 2024 to 2032.Growth is slightly front-loaded in the later 2020s as massive investments in renewables and infrastructure peak around 2030,then moderating a touch by 2031.Even at the low end, the market is comfortably above $90B by 2032. Year-over-year growth remains in a band of ~6 7%, illustrating steady expansion. These gures align with the narrative that global transformer demand will be buoyant due to continuous grid development needs.
Indian Transformer Market Projections (2024 2030)
Given Indias importance as a high-growth market, we include a focused table for Indias transformer market, using available forecasts up to 2029 and extending slightly beyond:
All gures are in USD billions.
| Year | India Market Size | Year-over- |
| (USD Bn) | Year Growth (%) | |
| 2024 | 5.09 | |
| 2025 | 5.49 |
7.8% |
| 2026 | 5.92 | 7.8% |
| 2027 | 6.38 | 7.8% |
| 2028 | 6.88 | 7.8% |
| 2029 | 7.44 | 8.1% |
| 2030 |
8.05 |
8.2% |
Sources: Markets and Markets forecast (2024 2029)
Indias market shows growth from about $5.1B in 2024 to over $7.4B by 2029 (as per the cited report) ,implying ~7.9% CAGR. By 2030, crossing $8B is plausible. This reflects how Indias transformer demand growth outpaces the global average, driven by its large-scale grid expansion. The growth percentage slightly increases towards the end of the decade, potentially due to acceleration in renewables integration and perhaps exports.
SUPPLY CHAIN ANALYSIS AND CHALLENGES
The transformer supply chain is global and complex, involving raw materials, component suppliers, and logistics that span multiple countries. In recent years, this supply chain has faced significant challenges, some of which continue to impact production and delivery timelines. Key aspects of the supply chain and associated challenges include:
- Critical Raw Materials:
Transformers rely on a few critical materials, most notably grain-oriented electrical steel (CRGO) for cores, copper (or aluminum) windings, and high-grade insulating oils and papers. CRGO steel, which is essential for efficient transformer cores, is produced by only a handful of companies globally and often in limited geography (Japan, China, Russia, some EU producers). Many countries lack domestic CRGO production for instance, India imports 100% of its transformer-grade steel, largely from Japan and a few other sources. This concentration makes the supply chain vulnerable. Any disruption at a major CRGO plant (due to geopolitical issues or technical outages) can cause steel shortages and price spikes for transformer makers worldwide. Similarly, copper prices have been volatile, reaching historical highs, which raises input costs; while copper is globally traded, procurement at stable prices is a challenge for manufacturers quoting long-term contracts
- Component Supply:
Beyond raw materials, transformers require numerous engineered components: bushings, tap changers, insulation structures (pressboard), cooling equipment (radiators, pumps, fans), and control devices. Many of these have their own concentrated supply chains. For example, high-voltage bushings might be sourced from only a few firms globally. The pandemic and subsequent logistic issues affected the supply of such components, leading to delays. If even one critical component (say an on-load tap changer for a power transformer) is delayed, the whole transformer delivery gets pushed out. Manufacturers are now qualifying multiple suppliers and keeping safety stocks to address this. However, quality requirements are stringent (especially for high voltage parts), limiting how many suppliers meet the standards. Global shipping bottlenecks in 2021 2022 also impacted the supply chain long lead components stuck in ports added to delays.
- Manufacturing Bottlenecks and Lead Times:
The culmination of raw material and component issues, combined with a rapid surge in orders, has led to unprecedented lead times for transformers, especially large ones. Lead times for large power transformers have stretched from a few months to several years. According to industry reports, delivery for a new EHV transformer that once took 4 6 months can now take up to 24 36 months (2 3 years). In extreme cases, manufacturers have quoted 120 to 210 weeks (up to 4 years) for the largest units. This transformer supply bottleneck has alarmed utilities and governments, as it threatens to slow down grid projects and maintenance. A U.S. study noted that in 2024, lead times for transmission-scale transformers are commonly 3 6 years, a dramatic increase from pre-pandemic norms. The reasons include surging demand (utilities ordering more spares after experiencing recent storms/outages), limited global manufacturing capacity for the very largest transformers, and the aforementioned supply chain lags. Distribution transformers have also been in short supply: in the U.S., a combination of mass electrification and storm rebuilds caused a shortage of pole-mounted distribution transformers, with lead times jumping from 3 6 months to over 12 months in many cases. Manufacturers are expanding shifts and adding new production lines to catch up, but ramping up takes time due to skilled labor and supply constraints.
- Logistics and Transportation:
Shipping large transformers is itself a logistical challenge. These units often weigh hundreds of tons and require specialized transport (multi-axle trucks, rail transport, and heavy-lift ships). Cross-border transportation can face delays due to customs and permit issues, especially if the route infrastructure is lacking. The transport of an EHV transformer from factory to site can take weeks or months and is susceptible to delays from weather or infrastructure bottlenecks (e.g., congested ports). COVID-era port congestions did cause some transformers to be stuck in transit. Logistics costs have also risen, impacting the delivered cost to customers.
- Quality and Standards Compliance:
Meeting diverse international standards (IEC, IEEE/ANSI, etc.) is a supply chain consideration. Components need to comply with local grid codes or specifications, so a transformer built for export might need different settings or accessories. This sometimes means maintaining multiple design variants and inventories, adding complexity. It also means a component made in one country must have appropriate certifications for use in another, occasionally causing hold-ups if approvals are slow.
- Geopolitical and Trade Issues:
Trade tensions and tariffs have also affected the transformer supply chain. For example, tariffs on steel or electrical equipment between major trading partners can increase costs. Some countries have expressed security concerns about foreign-made transformers (the U.S. at one point restricted import of Chinese-made bulk power equipment due to cyber-security worries). Such policies can shift supply chain patterns e.g., U.S. utilities seeking non-Chinese sources, which might mean more orders for Indian, Korean, or local U.S. manufacturers, putting pressure on those supply chains.
Given these challenges, the industry is responding in several ways. Theres a push for supply chain localization e.g., India exploring domestic CRGO steel manufacturing facilities, the U.S. funding programs to boost domestic transformer production. Manufacturers and governments are also considering creating strategic transformer reserves or standardizing designs to make emergency replacements easier. Utilities are adjusting procurement strategies, sometimes ordering critical spares well in advance. From the manufacturers side, as mentioned, investment in capacity and supply agreements is underway to relieve bottlenecks.
In conclusion, while demand is not a limiting factor there is plenty of market need the supply chain is the critical challenge facing the transformer industry. The current backlog and extended lead times are a symptom of a strained supply chain reacting to a rapid upswing in demand. But structural challenges (limited sources for CRGO steel, long manufacturing times for bespoke large units) will remain points of attention. Participants in the transformer market (both producers and buyers) are now acutely aware that supply chain management is as important as manufacturing capability in ensuring project timelines are met. This has prompted a more collaborative approach, with manufacturers working closely with suppliers and clients to forecast needs and streamline the end-to-end process of delivering a transformer from raw material to energized in the field.
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