Power crisis: As India braces for an intense summer, the nation’s power sector is at risk of a severe crisis. The peak-demand months of May and June could see significant electricity shortages, exacerbating the challenges of scorching heat waves. The National Load Despatch Centre has warned that unmet electricity demand could reach 15-20 gigawatts, particularly during non-solar hours. The Indian Meteorological Department (IMD) has also predicted heat waves across multiple regions between March and May 2025, further straining the country’s power infrastructure as cooling demands soar.
India’s electricity shortages stem from systemic vulnerabilities, which worsen during the summer due to peak demands and the intermittency of renewable energy sources. While the country has aggressively pushed for renewable energy expansion, solar power remains limited to daylight hours, creating supply gaps in the evenings and early mornings.
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Reasons behind power shortages
At the same time, India’s baseload power capacity remains heavily reliant on coal. However, in recent years, the growth of coal-based power plants has stagnated due to mounting global and domestic pressure to phase out fossil fuels. This has made it increasingly difficult to meet rising demand solely through renewable sources.
Policy mis-steps over the past decade have further compounded the issue. The Union power ministry’s National Electricity Plan (2017-22) effectively ruled out new thermal capacity additions beyond 2022, apart from the 50 GW of under-construction projects. Instead, the plan prioritized scaling up renewables while discouraging imported coal-based projects due to volatile global coal prices.
India’s power shortages are not a new phenomenon. Every summer, power cuts are a common issue, especially in high-load months. The problem was starkly visible last year when frequent outages led to widespread protests in parts of Uttar Pradesh. With global temperatures on the rise, the country’s electricity demand is at record highs, making it even harder to ensure an uninterrupted power supply.
This year, May is expected to be the most critical month, followed by other peak-demand periods. The projected peak demand for 2025 stands at 270 GW, up from 250 GW last year, raising serious concerns among grid operators.
Strategies to address power crisis
India must urgently expand its installed energy storage capacity, which remains dismally low at under 5 GW, even as its total renewable energy capacity has surpassed 200 GW by the end of 2024. The Central Electricity Authority (CEA) has recommended co-locating energy storage systems with solar projects to counter grid stability issues posed by intermittent renewables.
Battery energy storage systems (BESS) and pumped storage plants (PSP) can help store surplus solar power during the day and release it when demand peaks at night. If these recommendations are implemented in a timely manner, India could significantly mitigate energy shortages.
Strengthening demand-side management
The NLDC report emphasizes the need for robust demand-side management (DSM) strategies to reduce stress on the grid. DSM strategies include shifting electricity use to off-peak hours and implementing Time-of-Use (TOU) tariffs, which incentivize consumers to adjust their consumption patterns through differential pricing.
Another crucial DSM tool is demand response programs, which encourage consumers to voluntarily reduce electricity consumption during peak hours in exchange for incentives. Additionally, promoting energy-efficient appliances and conservation practices can further optimize electricity consumption.
Section 11 of the Electricity Act can be leveraged to increase output from imported coal-based thermal plants, which remain vital for meeting peak demand. While these plants have higher operating costs and are used less frequently, they play a crucial role during critical shortages.
Planned outages of thermal plants should be shifted from high-demand months (April to July) to lower-demand periods (November to January). Given the current lack of large-scale energy storage, thermal plants continue to be indispensable in providing baseload support during non-solar hours.
Revisiting policy missteps from 2016-17
The government must take corrective action to address policy missteps from the past decade. While there have been efforts to rectify the situation—such as a renewed push for nuclear power, additional thermal capacity, and increased coal imports—more decisive steps are needed. This includes mandating energy storage for all new solar projects and ensuring smoother integration of renewable energy into the grid.
The reluctance of private players to invest in thermal generation is another concern. The government must explore ways to incentivize private sector participation in power generation. Additionally, nuclear capacity expansion has been progressing at a sluggish pace and needs greater policy support.
Impact of power shortages
Electricity shortages affect not only residential consumers but also key sectors such as agriculture, healthcare, and industry. Power outages can lead to substantial economic losses due to reduced productivity, disrupted commercial activities, and potential damage to equipment and infrastructure.
Ensuring a reliable power supply is critical for sustaining economic growth, maintaining social well-being, and protecting public health. A collaborative effort involving the government, policymakers, grid operators, power generation companies, and consumers is essential to building a resilient and sustainable energy future for India.
India’s electricity crisis underscores the urgent need for a balanced energy transition strategy—one that prioritizes renewables while ensuring energy security through thermal and nuclear capacity expansion. Strengthening energy storage infrastructure, optimizing grid management, and implementing proactive policy measures can help India navigate its growing electricity demand without compromising sustainability goals. The time to act is now, before another sweltering summer pushes the nation’s power sector to the brink.