India’s summer months often expose the grid to peak stress conditions. In 2025, while power demand soared, effective government interventions and favourable weather patterns helped avert supply shortages. With long-term goals of decarbonisation and energy security on the horizon, it is imperative to balance short-term crisis management with long-term structural reforms. Industry experts discuss the current trends, peak demand forecasts and strategic pathways – including energy storage, demand response and efficient market mechanisms – to ensure a reliable and sustainable power supply. Edited excerpts…
What is your assessment of the power demand in India for the upcoming summer months?
Rohit Bajaj
India’s peak summer power demand in 2025 reached 241 GW on June 9. This demand was met without any power shortages, thanks to proactive government measures. These included extending Section 11 of the Electricity Act, 2003, mandating imported coal-based plants to run at full capacity till June-end, activating gas-based power plants and ensuring sufficient domestic coal supply.
The weather also played a key role this year. Despite forecasts of an intense summer, early monsoon and widespread unseasonal rains kept temperatures lower, resulting in lower-than-expected power demand. With an increase in hydro and wind, as well as a sustained supply from coal-based generation, supply liquidity on power exchanges improved and drove prices down. In May 2025, the average day-ahead market (DAM) price was Rs 4.12 per unit, down 22 per cent year on year, while the real-time market (RTM) averaged at Rs 3.43 per unit, a 28 per cent drop. On May 25, 2025, heavy rains pushed RTM prices down to Rs 1.53 per unit, with near-zero prices during several time blocks (9:15 a.m. to 2:30 p.m.). Even in June, prices remained subdued – DAM prices averaged Rs 4.27 per unit during June 1-19, 2025 (a 21 per cent year-on-year decline), while RTM prices averaged Rs 4.08 per unit (down 24 per cent year-on-year).
This trend is expected to continue with the ongoing monsoon season, which is driving an increase in wind, hydro and solar power in the overall energy mix, thereby improving supply liquidity on the power exchanges. Moreover, monsoon months typically see lower exchange prices as compared to summers, which will help discoms and commercial and industrial consumers meet short-term demand more cost-effectively by replacing expensive power with exchange-based procurement.
Pankaj Batra
Peak power demand in India occurs during the hot and humid months from May to September. This demand is primarily driven by air conditioner usage, which continues to rise alongside improving economic conditions. However, power demand depends entirely upon the weather. In some years, April experiences extreme heat. The peak demand in 2022-23 was in April, at 215,888 MW, whereas the peak demand in 2023-24 was in September, at 243,271 MW, and the peak demand in 2024-25 was in May 2024 at 249,856 MW. In 2025, so far, April had a peak demand of 235,321 MW. In May 2025, the demand was 231,536 MW, which was less than the April demand. Considering the normal monsoon forecast for this year, as predicted by the Indian Meteorological Department, it appears that the peak demand for the year may not exceed the peak demand for last year by much, or at all.
If the South-West monsoon weakens, the humidity increases, resulting in increased power demand, and wind generation decreases (with an installed capacity of 51.1 GW out of a total generating capacity of 472.5 GW), creating a bigger gap between supply and demand.
Shyamasis Das
So far this year, India has managed to meet a peak power demand of about 241 GW, recorded on June 9. Last year, the peak demand catered to was 250 GW, in the month of May, which is an all-time high. Since 2019, that is before the Covid-19 induced disruption, the country’s peak demand has grown at an average annual rate of 5 per cent. This summer-time trend is primarily driven by an increase in cooling load due to greater adoption of air conditioners, which is largely driven by higher wet-bulb temperatures – a combination of high air temperature and high level of relative humidity that affects human comfort. Hence, depending on weather conditions, power demand may rise further in the coming months. Notably, the peak demand for a given year is not necessarily recorded during the typical summer months. For example, the previous all-time high peak power demand of around 243 GW was registered in September 2023, which is typically considered a post-monsoon month.
Somit Dasgupta
According to the Short-Term National Resource Adequacy Plan, prepared by the National Load Dispatch Centre (NLDC), the peak demand was expected to be 273 GW, which was to occur on June 3, 2025. This estimate was based on several assumptions, and weather plays a dominant role here. Since the temperature in May and early June 2025 was much cooler compared to the previous year, the actual peak demand during 2025-26 was only 241 GW, which occurred on June 9, 2025.
India’s electricity demand has been growing at about 6.4 per cent per year. Since the peak in 2024-25 was about 250 GW, going by a simple back-of-the-envelope calculation, we can expect a peak demand of about 266 GW during 2025-26. The mid-term review of the 20th Electric Power Survey (conducted by the CEA) puts the peak demand at 277 GW during 2025-26. Incidentally, the International Energy Agency (IEA) stated that India’s electricity demand will hover around 6.3 per cent during 2025-27. However, whether actual demand aligns with these estimates will depend on the monsoon season, among other factors. The India Meteorological Department has forecast that the long-range monsoon for June-September 2025 will be about 106 per cent of the normal. This is likely to reduce power demand from air conditioners and agricultural activities. Hence, if the monsoon prediction is correct, actual power demand may fall short of the projections made by the NLDC, CEA and IEA. That said, a peak demand in the range of 260-265 GW seems likely.
Sabyasachi Majumdar
The power demand growth in India has been erratic during the summer months of the current fiscal, mainly due to aberrant weather patterns. The energy demand grew by 2.2 per cent in April 2025 (over April 2024) but then declined a little by over 4 per cent in May 2025 (year on year) due to rains and mild summer conditions in several parts of the country. While there was energy demand growth in early June this year, the demand growth is likely to be in the low single digits during the coming quarter, given the likelihood of satisfactory monsoons. However, any unusual breaks in monsoon rains could lead to a spike in demand, driven by increased cooling needs and increased demand from the agricultural sector.
What, in your view, should be the key short- and long-term strategies to meeting the country’s power demand?
Pankaj Batra
Coal-based generation capacity at the end of 2023-24 was 49.23 per cent of the total generation capacity, and reduced to 46.68 per cent at the end of 2024-25. Meanwhile, renewable generation capacity (including large hydropower) at the end of 2023-24 was 43.12 per cent of the total generation capacity, and increased to 46.32 per cent at the end of 2024-25. The remaining generation capacity is gas, diesel (negligible) and nuclear. With nuclear, the share of non-fossil fuel-based generation capacity at the end of 2024-25 was 48.02 per cent. It is likely that the target of 50 per cent non-fossil fuel-based capacity by 2030 will be met by the end of 2025-26 itself. The renewable generation capacity, in percentage terms, is expected to keep increasing, while the share of coal-based generating capacity is expected to decrease. Most of the upcoming renewable generation capacity will comprise solar and wind, both of which are intermittent. Therefore, the key future requirements will be standby generation, storage capacity and demand response – with storage and demand response expected to play a major role. The Indian government has already taken steps to promote hydro storage, including pumped storage capacity and other types of storage (mainly electrochemical storage in the form of batteries), through incentives. The draft National Electricity Policy also emphasises the importance of demand response, supported by corresponding regulations by the Central Electricity Regulatory Commission through the Ancillary Services Regulations, 2022. However, since power demand is primarily managed at the state level, it is essential for states to take the initiative and formulate their own demand response regulations.
Key strategies for meeting India’s future power demand include continued emphasis on energy storage and demand response. From an energy security perspective, it is crucial to promote the domestic manufacturing of essential components for solar and wind generation, as well as electrochemical storage systems. Additionally, pilot projects should be undertaken to explore emerging storage technologies. States should promote demand response mechanisms and encourage capacity building in this area.
Shyamasis Das
To cater to the rising power demand, discoms should be in a position to arrange supply. In the short term, discoms should contract sufficient power in advance and prepare a contingency plan. The focus should be on developing a long-term comprehensive strategy.
To this end, readiness is the key. Discoms can achieve readiness through effective load forecasting, which provides better visibility of the possible demand, and the development of a resource adequacy (RA) plan, which helps serve the load. A simplified, straitjacket approach to load forecasting will not be effective. Understanding how weather conditions affect power demand will be critical due to the rising share of cooling-related power demand during summer months. The government has issued Resource Adequacy Guidelines and recently launched a resource adequacy and capacity expansion planning tool called STELLAR to assist discoms in the development of their own RA plans.
It is important to underline that the country-level headline figure of peak power demand does not provide a complete picture of its impact and the required strategy. It is critical to factor in the time of day at which the discom experiences high demand. If the demand is high around mid-day, it may not be all bad news because inexpensive solar and other sources of renewable energy are available during these hours. However, managing peak demand during evening and nighttime is a major challenge for discoms. The cost of power is high during non-solar period as the supply is largely dependent on expensive coal-based thermal power plants, which also act as “swing producers” in India due to the limited availability of gas-based power supply and large-scale energy storage capacity.
The country needs to adopt a multi-pronged approach, covering both supply-side and demand-side interventions. On the supply side, along with adding renewable energy capacity, it must scale up utility-scale energy storage capacity through battery energy storage systems (BESS) and pumped hydro storage to ensure clean energy is available “on call”, particularly during peak demand hours. Progress on this front is currently lagging. As per the National Electricity Plan, India must install 50 GW of non-fossil fuel-based capacity annually between 2024-25 and 2026-27 and 53 GW of capacity between 2027-28 and 2031-32, along with BESS capacities of around 34.7 GWh by 2026-27 and 236.2 GWh by 2031-32.
Supply-side actions alone will offer limited benefit. Discoms have to find solutions to avoid demand peaks and shift load to high renewable energy hours. Introducing a time-of-day (ToD) tariff regime for all consumers, including residential users, is necessary. This would require rapid roll-out of smart meters in the residential segment. Initially, this can be kickstarted in a staggered manner as country-wide coverage may take time. Moreover, the ToD tariff structure should allow enough dis-incentivisation of electricity consumption during evening and nighttime while encouraging greater adoption during solar hours. Discoms essentially need cost-reflective tariffs for their consumers.
Network-level interventions are also critical. Often, issues emerge at the distribution network or feeder level due to insufficient carrying capacity to handle local power demand surges. Discoms should carry out detailed load profiling at the distribution transformer and substation levels to identify potential choke points. Capacity augmentation should be done before the onset of summer. BESS can help discoms better manage local demand at the distribution level.
Somit Dasgupta
To meet the power demand for the summer of 2025, the focus is on short-term measures – that is, making the most of existing assets. One such measure involves optimising coal-based generation by directing plants to import coal and operate at full capacity. This also applies to coastal plants designed to run on imported coal. Separately, the government has placed liquified natural gas (LNG) under the Open General License route to help generators get the best price through market-based mechanisms. However, gas-based plants may not find a place in the merit-order dispatch system, given the high price of LNG, and in such a situation, generators are directed to sell the excess power on the exchanges. Another step taken by the government is to delay the retirement of coal-based plants, with only about 2,100 MW earmarked to be phased out in the next seven to eight years. These measures aim to maximise the utilisation of existing generation assets and help meet demand. However, this also poses risks to achieving net zero by 2070. Two facts must be kept in mind. First, the power sector accounts for 40 per cent of greenhouse gas emissions, and second, each MW of coal/gas-based generation kept running keeps 4 MW of renewable capacity at bay.
Some other measures that can help meet the summer demand include shifting the planned maintenance of conventional generators to the winter months, as well as utilising the surplus power from captive power plants.
Sabyasachi Majumdar
The capacity addition that has taken place in both the renewable and thermal segments has helped meet the growing demand. India was able to comfortably meet the highest peak demand of 237 GW on June 9, 2025. To meet the growing 
