India Braces for Record Power Demand, Risks Galore

India’s peak power demand is projected to hit 270 GW this summer, surpassing last year’s record of 250 GW.

Kindly note the image has been published only for representational purposes. Photograph: Vivek Prakash/Reuters

With the impending arrival of scorching summers that are expected to drive up cooling requirements across the country, India’s peak power demand is expected to touch a new high of 270 Gw this year, higher than the record 250 Gw demand in May 2024.

While 2024’s hunger for power was met successfully, India is even better placed this time around to meet the projected peak power demand, given its higher coal stocks and a growing share of renewables.

Coal stocks at government-owned Coal India mines grew to about 125.54 million tonnes (mt) as on March 18, 2026, compared with 106.78 mt on April 1, 2025.

Singareni Collieries Company, another government company, currently holds around 5.75 mt of coal stock in addition to 15.75 mt stock held by commercial mines. About 12 mt of coal is in transit and 5.49 mt is at ports and goods-shed sidings.

Power plants, too, are already sitting on around 53.41 mt, enough for nearly 23 days at the current rate of consumption.

The Cabinet Committee on Security on Sunday declared that ‘adequate coal supplies at all power plants will ensure no electricity shortage in India’.

The committee, chaired by Prime Minister Narendra Modi, was reviewing the situation with the power and fertiliser sectors, along with the availability of crude oil, gas, and other petroleum products amid the West Asia conflict that has left most Asian nations scrambling to secure oil and gas supplies.

However, Central Electricity Authority (CEA) Chairman Ghanshyam Prasad is confident of meeting the higher demand despite the West Asia crisis.

“Gas-based power plants are used very less. So, the West Asia conflict will not have much impact. It will be taken care of with the new capacity addition. This year, a lot of power plants have been added, with more than 50,000 Mw capacity,” he said.

Rising renewables

In FY26, as of January 31, India had added a record 52.5 Gw of generation capacity from all sources, with over 39 Gw coming from renewable energy (RE).

In fact, non-fossil sources now contribute over 50 per cent to the overall installed capacity of 520 Gw.

Renewables, including solar, wind, small hydro, and biopower, contributed 16.64 per cent to the total electricity generated as of January 2026, according to data compiled by the CEA and the National Power Portal.

That share rises to 29.4 per cent after adding nuclear and large hydro.

According to a recent study by Moody’s-affiliate Icra ESG Ratings, India’s apparel plants — which use energy-hungry power looms that contribute significantly to India’s exports — now draw about 28 per cent of their electricity needs from renewables.

“The country is reasonably placed to meet the anticipated peak demand in the summer of 2026,” said Anujesh Dwivedi, partner, Deloitte India.

In addition to a large quantum of RE capacity, the incremental installed generation capacity includes 10,241 Mw in coal-based thermal power plants, 600 Mw in nuclear power plants, and 4,236 Mw in large hydro power projects, all of which will help in meeting peak demand in non-solar hours, he added.

“India’s growing renewable capacity, reliable conventional generation, and an increasingly active short-term electricity market allow the country to manage peak demand effectively,” said Tanya Rana, energy analyst (South Asia) at the Institute for Energy Economics and Financial Analysis (IEEFA).

Market and regulation

In fact, the short-term electricity market increasingly provides flexibility to manage surges. Total short-term transactions, including the deviation settlement mechanism, have risen from 66 billion units (BU) in FY10 to 238 BU in FY25.

The volume of short-term electricity transactions as a percentage of total electricity generation varied from 8.9 per cent to 13.03 per cent during the period.

Additionally, ahead of the peak season, the government has issued orders for blending imported coal and activating gas-based power generation to manage evening peak load.

India is also considering invoking an emergency clause to force thermal power plants that use imported coal to maximise output ahead of summer after the West Asia conflict hit gas supplies, as per a Reuters report.

However, current geopolitical conditions continue to pose a threat to the fossil fuel supply chain.

“Fossil fuel supply risks, including disruptions in coal, oil, or gas due to geopolitical tensions or operational constraints, can affect conventional generation,” Rana cautioned.

Maximising usage of available thermal power plants is expected to mitigate concerns over gas-based power plants’ operations, say experts.

Rajeev Juneja, president, PHD Chamber of Commerce and Industry (PHDCCI), said: “The country’s energy basket is well insulated from import dependence for the coming season. India has enough stock of coal to meet its power requirements for the ensuing months.”

Disruption risks

But other challenges to meeting peak summer power demand remain. For one, coal imports have declined this year.

Non-coking coal imports fell to 127.8 mt during April-January FY26 from 141.18 mt in the same period last fiscal, while total coal imports dropped 4.2 per cent to 213.1 mt, according to data compiled by mjunction services, a B2B ecommerce platform.

Rising shipping prices may continue to keep import levels subdued, mjunction said.

Second, India continues to face challenges with transmission networks for non-fossil sources, leading to curtailment of RE production, which limits the effective availability of power in high-demand regions.

A growing mismatch between demand patterns and supply availability is another issue. There are two demand peaks — one in the afternoon and another in the evening — which become hard to meet as solar generation declines through the afternoon.

“India is increasingly witnessing dual peaks. The evening peak is particularly challenging, as solar generation declines sharply just when cooling demand remains high, placing significant pressure on coal- and hydro-based generation,” Rana said.

In such a situation, limited smart metering and energy storage infrastructure reduce the grid’s flexibility to respond quickly to sudden demand spikes.

Extreme weather events, such as heatwaves, can further push demand unexpectedly, increasing the risk of short-term stress.

On the demand side, the summer this year is expected to be hotter because of the El Nino effect, which is expected to intensify between May and July and can disrupt the monsoon, critical to cooling India.

A weaker monsoon will also affect hydropower generation, adding to the demand-supply imbalance.

Role of states

While India has adequate capacity at the national level, states can play a critical role in effectively meeting peak demand, given that they are responsible for demand management, distribution, and grid readiness.

“To manage rising peaks, states will need to accelerate energy storage and green hydrogen deployment, strengthen demand-side management, and improve system flexibility to better align consumption with renewable generation, particularly during critical evening hours and extreme weather events,” Rana said.

The country met its highest-ever peak demand of 250 Gw in May 2024 largely due to lower-than-projected demand growth and a reasonably good monsoon.

But the overall demand growth trajectory shows little sign of declining, even as demand is expected to remain robust this year as manufacturing activity has picked up with new factories opening up.

In the future, this could rise further as power-hungry data centres expand and more electric vehicles come on to the roads.

Whether India can meet all of those with its current generation capacity remains to be seen.

Feature Presentation: Aslam Hunani/Rediff