Although sector installed capacity was mostly flat year over year in 2024, average energy generated improved by a marginal 2.2% to 4,280 MW in Q3'24 from 4,189 MW in 2023. This improvement was in spite of the challenges of grid collapses, infrastructure vandalism, liquidity constraints, and gas supply shortages in the period. In 2025, structural reforms and market-driven efficiencies are expected to reshape the sector. Notably, the shift to bilateral trading should allow generation companies (GenCos) to sell power directly to distribution companies (DisCos), easing liquidity pressures and improving cash flow. Further tariff adjustments are also on the cards as the government looks to reduce electricity subsidies, while other initiatives aim to close the metering gap and improve revenue collection.
Elsewhere, rising gas prices and supply constraints may pressure GenCos' margins, but grid investments under the Presidential Power Initiative (PPI) and the state-level market decentralization are expected to enhance long-term stability. Additionally, renewable energy adoption, driven by government policies and financing initiatives, should further improve the sector's outlook.
