India faces power glut by day, shortage by night, as demand grows

• RES generation up 22% y-o-y to 27,579 MU in April
  
  
• Peak demand rises 8.9% to 256 GW; shortages hit 40.85 MU on single day
  
  

BigMint's analysis of NLDC (National Load Despatch Centre) daily PSP reports and IEX (Indian Energy Exchange) transaction data for April 2026 reveals a power market undergoing rapid structural transformation. The data shows a system managing record demand growth and renewable energy penetration, but doing so at the cost of extreme daily price volatility and recurring supply shortages during evening peak hours.

 

Key observations

• Severe shortage period: 16-18 April and 24-27 April saw the highest shortages, coinciding with record peak demands.
  
  
• Worst day: 25 April recorded both the highest peak demand (256,117 MW) and the largest energy shortage (40.85 MU).
  
  
• Highest energy shortage: Despite peak demand being lower on 26 April (237,218 MW), energy shortage peaked at 45.44 MU, indicating a sustained deficit throughout the day rather than a brief peak-only shortage.
  
  
• Price correlation: Days with shortages above 10 MU saw IEX MCP consistently above INR 6,000/MWh, while days with minimal or no shortages saw MCP below INR 4,000/MWh.
  
  

Demand-supply drivers

Record solar generation crashes prices

Solar generation peaked at 70,000-81,000 MW between 11 AM and 2 PM on clear days, according to 15-minute SCADA data from NLDC. On 25 April - the month's highest demand day - solar generation hit 80,890 MW at 12:00 PM.

During these hours, thermal generation was reduced to 137,000-140,000 MW from its evening peak of 184,000 MW, as grid operators preferentially scheduled cheaper renewable power. The combination of high solar injection and moderated thermal output created sustained oversupply on the exchange.

On 5 April, with daily demand at a monthly low of 200,631 MW (likely a weekend/holiday effect), the oversupply was most acute. IEX MCP touched INR 0.5/MWh at 12:00 PM and remained below INR 400/MWh for most daylight hours.

On 10 April, at 12:00 PM, MCP was INR 399/MWh. By 7:00 PM, with solar falling to zero, price hit INR 10,000/MWh - a 25-fold increase in seven hours.

Evening peak shortage

The time of maximum demand met, as recorded in NLDC's daily reports, shifted predominantly to 7:00-8:00 PM in April 2026, from late morning (9-11 AM) in April 2025 - confirming the evening peak as the new critical period.

Peak demand trajectory in April 2026:

• 1 April : 215,832 MW
  
  
• 15 April : 230,473 MW
  
  
• 24 April : 252,075 MW (record)
  
  
• 25 April: 256,117 MW (peak for month)
  
  

During the evening peak on 25 April (7:30 PM), with solar at 0 MW, the generation mix was:

• Hydro: 29,163 MW (near maximum)
  
  
• Gas: 7,472 MW (full dispatch)
  
  
• Thermal (coal): 183,672 MW (maximum sustained level)
  
  
• Wind: 8,286 MW
  
  

Despite this, NLDC reported an energy shortage of 40.85 MU for 25 April and a peak shortage of 3,949 MW - the highest of the month. This supply gap translated directly into IEX price caps, with MCP hitting INR 10,000/MWh for multiple evening hours on 16-18 April and 24-26 April.

Exports continue despite shortages

NLDC's transnational exchange data shows India remained a net exporter throughout April, with net outflow ranging from -33.67 MU to - 56.3 MU daily. Primary export destinations were Bangladesh, Nepal, and Bhutan via Godda, Bheramara, and cross-border links.

Significantly, even on 25 April - the day of maximum domestic shortage (40.85 MU) - net exports continued at - 39.10 MU. This indicates exports are governed by firm, long-term contractual arrangements (GNA/PPA) that cannot be curtailed during short-term domestic stress, adding to the supply challenge during peak deficit periods.

Inter-regional flows showed consistent power transfer from Eastern and Western regions (surplus coal-producing areas) to northern and southern regions (high-demand, deficit areas). ER-SR and WR-SR corridors operated at near-capacity during peak hours.

Coal: The stretched backbone

Coal remained the dominant source, contributing over 70% of total generation in both April 2025 and 2026.

However, analysis of 15-minute data shows thermal generation being actively modulated - reduced to 140,000-150,000 MW during solar hours and pushed to 184,000 MW during evening peaks.

This daily cycling of coal plants - typically designed for baseload operation - indicates operational stress. NLDC reports note multiple instances of "RSD/Low Schedule" instructions to coal units, where generators were asked to reduce output during daytime to accommodate solar.

Gas: Abandoned swing resource

Gas, naptha, and diesel generation fell 33% y-o-y to 2,141 MU in April. The 15-minute data shows gas plants operating only during evening peak hours (typically 6-10 PM), with output spiking to 7,000-8,000 MW precisely when solar falls to zero.

This pattern confirms gas is being used as a peaking resource, but high fuel costs (imported LNG, naptha) are limiting its dispatch. At INR 10,000/MWh IEX prices, gas generation becomes marginally economical, explaining its brief evening runs.

Hydro: Flexible balancer

Hydro generation was actively ramped up during evening hours, from 8,000-10,000 MW during the day to 25,000-29,000 MW by 7-8 PM. On 25 April, hydro contributed 29,163 MW at 7:30 PM - its maximum observed level for the month.

This ramping capability makes hydro the single most important flexibility resource currently available to grid operators. However, hydro is geographically concentrated (Himalayan, Western Ghats, and Northeast regions) and subject to seasonal water availability, limiting its ability to scale further.

What's in store?

For distribution companies: The near-doubling of IEX purchase bids indicates growing spot market reliance. With average evening prices at INR 8,000-10,000/MWh, unhedged exposure is financially unsustainable. Discoms must secure evening-peak contracts through hybrid (solar+storage) projects or bilateral arrangements.

For generators (renewable): Selling solar power into the spot market at INR 0-INR 399/MWh during daytime is not viable. Storage-coupled solar projects - capable of shifting generation to evening hours - will command premium realsations. The arbitrage opportunity (charge at INR 0, discharge at INR 10,000) yields a theoretical gross margin of INR 10,000 per MWh stored, making battery economics highly attractive.

For policymakers and grid operators: The primary intervention required is large-scale energy storage. The data shows that without storage, each additional MW of solar capacity widens the daytime glut and worsens the evening deficit. Pumped hydro projects (e.g., Tehri PSP) and battery storage need to be fast-tracked. Market design reforms - such as separate day-ahead and real-time markets, or ancillary services markets for ramping and frequency response - would also help manage volatility.

Outlook for near term (May-June): With summer temperatures expected to rise further, peak demand is likely to exceed 260 GW. Unless significant new capacity (conventional or storage) is commissioned, evening shortages will intensify, and IEX price caps will become more frequent. The only moderating factor will be higher wind generation during monsoon onset, typically from mid-June.