India's electricity demand is forecasted to grow at a compound annual growth rate of 6.0–6.5% over the next five years, driven by increasing consumption from electric vehicles (EVs), data centers, and green hydrogen projects, according to ratings agency ICRA. Despite a projected lower growth rate in FY2026 compared to GDP growth, the demand is expected to see improvement from previous years. The thermal plant load factor is anticipated to stay at 70% in FY2026, supported by renewable energy generation and thermal capacity additions. The EV segment is expected to witness significant market penetration, particularly in three-wheelers, two-wheelers, e-buses, and passenger cars. Green hydrogen capacity is likely to grow gradually due to cost considerations relative to grey hydrogen. While spot power prices decreased in FY2025, distribution companies are under financial strain, with an increased cash gap projected for FY2026. ICRA maintains a negative outlook on the power distribution sector, highlighting financial weaknesses and limited reforms.