Heatwave, demand surge, coal crunch push India's power grid to extreme stress

• Peak demand rises 9% y-o-y to record high for Apr month
  
  
• IEX spot prices soar as buyers outnumber sellers 5:1
  
  

Indias power system is facing acute stress in April as demand surges to record levels amid an intensifying heatwave. Combined with a shift in peak load to late evening hours, when renewables supply is not available, the widening gap between demand and available supply highlights growing stress across the system, with coal stocks declining, gas-based generation curtailed, and renewables unable to support evening peaks.

Power generation mix shifts amid collapsing gas supply

India's total electricity generation during 1-26 April 2026 stood at approximately 144,241 million units (MU), marginally higher than the 143,500 MU generated in the same period of 2025. However, the composition of the generation mix underwent significant changes.

Coal-fired generation averaged 102,400 MU, a modest decline of 1.7% y-o-y. However, in the last ten days of April, as the heatwave intensified, daily coal generation averaged over 4,150 MU -- a 6.4% increase over the same period in 2025. Although coal plants have been running harder, stocks are thinner.

Renewable generation -- wind, solar, biomass, and others -- jumped nearly 15% to approximately 23,500 MU, reflecting India's continued expansion of solar and wind capacity. Renewables contributed meaningfully during daytime but offered little relief after sunset.

The most dramatic decline was in gas, naphtha, and diesel generation, which collapsed by over 40% to just 1,730 MU. The Middle East conflict has made LNG imports scarce and expensive, forcing gas-based power plants to reduce output or shut down entirely.

Peak power demand rises y-o-y, high evening load strains thermal supply

In April 2025, the highest peak demand recorded in the first 26 days was 235,190 MW on 25 April. The average peak demand for the period was approximately 218,500 MW.

April 2026 has been dramatically different. On 24 April, peak demand hit 252,075 MW. The very next day, 25 April, demand surged to 256,117 MW -- the highest ever recorded for the month of April. The average peak demand for the first 26 days of April 2026 was approximately 227,500 MW, nearly 9,000 MW higher than the same period last year.

The timing of peaks has also shifted. In 2025, peak demand typically occurred between 3:30 PM and 4:30 PM. In 2026, peaks have been recorded as late as 10:59 PM on 21 April. Demand is staying high well into the evening hours after solar generation has faded, placing greater pressure on thermal power plants.

Peak power demand trends show a sharp uptick in April 2026 compared to last year. The highest peak demand reached 256,117 MW, rising by 8.9% from 235,190 MW in April 2025. Similarly, the average peak demand increased to around 227,500 MW, up 4.1% from 218,500 MW, indicating sustained demand pressure driven by heatwave conditions and stronger consumption patterns.

IEX market shows extreme stress

On 24 April 2026, purchase bids on the IEX reached 925,470 MWh, while sell bids were only 222,517 MWh -- a ratio of more than 4:1. The market cleared only 129,994 MWh, meaning that over 795,000 MWh of demand went unsatisfied. The Market Clearing Price (MCP) was INR 7,345 per MWh.

On 25 April 2026, purchase bids soared to 1,016,075 MWh -- over one billion units -- while sell bids were just 197,353 MWh. The imbalance was roughly 5:1. Only 113,241 MWh was actually traded. The MCP hit INR 7,577 per MWh.

In comparison, the highest MCP recorded in April 2025 was INR 7,480 per MWh on 22 April, with purchase bids at 590,829 MWh and sell bids at 149,673 MWh. The current imbalance far exceeds anything seen in the previous year.

Coal stocks: Critical levels worsening

Total coal stocks at power plants across India stood at approximately 54.75 million tonnes (mnt) on 26 April 2026 -- down nearly 8% from 59.28 mnt at the end of March.

The number of plants operating with critical coal stocks has increased to 20, up from 18 just a week earlier.

Pithead plants were at 59% of the normative stock. Non-pithead plants were at 72%. Washery rejects-based plants were in the worst condition, with total stocks at just 8% of normative levels.

 

Outlook

India's power system is under stress on three fronts. Gas-based generation has collapsed by 40%, removing a critical source of flexible capacity. Peak demand has reached 256 GW, far exceeding previous April records. The IEX market is showing extreme imbalances, with buyers outnumbering sellers by 5:1 and prices hitting the ceiling.

Coal stocks are falling, and the number of critical plants is rising. The situation is most acute in southern states -- Telangana, Andhra Pradesh, and Tamil Nadu -- where several large plants are operating at 20-30% of normative stock levels.

The next two to three weeks will be critical. If the heatwave persists, demand could climb even higher. If coal deliveries do not accelerate, more plants will run out of fuel. Moreover, if the Middle East conflict continues, gas-based generation will remain offline.