Key facts
- India's power shortfall in September reached 560 million kWh, the highest since August 2023.
- Total electricity generation increased 11.3% year-over-year to 174.17 billion kWh in September.
- Coal-fired generation rose 13.3% and renewable generation increased 25.1% in September.
- Nearly 40% of India's operational coal plants have critically low coal inventories.
- India's total coal demand is projected to rise 4.2% to 1.353 billion tons this year.
India's power shortfall escalated to a three-year high in September, reaching 560 million kilowatt-hours (kWh), according to Reuters calculations of data from regulator Grid-India. This marks the most significant deficit since August 2023.
Despite an 11.3% year-over-year increase in total electricity generation to 174.17 billion kWh for the month, higher residential and industrial demand, exacerbated by El Niño's impact of low rainfall and higher temperatures, outstripped supply. Both coal-fired and renewable energy generation saw increases compared to the previous year, but the overall demand surge led to the widening shortfall.
Coal-fired power plants, which constitute the largest share of India's electricity generation at 66.03% in September, operated at increased capacity. Their generation rose by 13.3% year-over-year. Renewable energy generation also jumped by 25.1%, but its share in the total mix decreased to 17% from 19.5% in August.
Compounding the issue, nearly 40% of India's operational coal-fired power plants are currently facing critically low coal inventories, with stocks falling below 25% for many. This situation arises as demand climbs due to El Niño, while monsoon rains have disrupted supply chains. The International Energy Agency projects India's total coal demand to increase by 4.2% to 1.353 billion tons this year.