NEW DELHI, October 3, 2026: India is facing renewed pressure on its electricity system after power shortages surged to their highest level in more than three years during September, even as coal-fired power plants increased generation to meet rising demand. Government data analysed by Reuters shows that the country’s electricity shortage reached about 560 million kilowatt-hours (kWh) in September, the highest level since August 2023.
The development comes at a time when electricity consumption was expected to moderate after the summer season. Instead, unusually strong demand, weaker rainfall and pressure on fuel supplies have kept parts of the power system under strain.
Electricity Demand Remains Unusually High
India’s electricity demand has remained elevated because of continued industrial activity and warmer-than-usual conditions. Peak demand had already reached an all-time high of around 271 gigawatts (GW) in May 2026, while September also recorded unusually strong requirements for electricity.
Grid-India data showed that overall electricity generation increased 11.3% year-on-year in September to 174.17 billion kWh. Despite this increase, supply was not sufficient to completely eliminate shortages during periods of peak demand.
Business Standard reported that the September energy shortage was around 544 million units, compared with 98 million units in August. The difference between reported figures reflects variations in datasets and calculation methods, but both reports point to a sharp increase in September.
Weak Rainfall Puts Pressure on Hydropower
One of the major factors behind the situation has been weaker rainfall. Reduced monsoon precipitation has affected water availability for hydropower generation, forcing the electricity system to rely more heavily on thermal generation.
Reuters reported that coal-fired electricity generation increased 13.3% in September from a year earlier. Coal accounted for approximately 66% of India’s total electricity generation, up from 64.6% in August.
Hydropower generation, meanwhile, has been affected by weaker rainfall and reservoir conditions. Bloomberg’s analysis cited by Moneycontrol said September hydropower output declined nearly 16% from a year earlier.
Coal Stocks Become a Key Concern
The increased dependence on coal has also highlighted concerns about fuel inventories at thermal power stations.
Reuters reported that roughly two out of five coal-fired power plants were operating with critically low fuel stocks. Separate reporting from Business Standard said 84 plants had critical coal stocks on September 30, with inventories at around 36% of the normative requirement.
Coal availability has been affected by a combination of strong demand, logistical challenges and disruptions in some coal-producing regions. Maintaining adequate supplies is particularly important because coal remains the largest source of actual electricity generation in India.
Renewable Energy Needs Storage Support
India’s renewable-energy capacity continues to expand, but the September shortage also highlights the importance of storage and grid flexibility.
Renewable electricity generation increased 25.1% in September to 29.62 billion kWh, according to the data cited by Reuters. However, renewables accounted for about 17% of total generation, down from 19.5% in August.
Solar power can produce substantial electricity during daylight hours, but demand often remains high after sunset. Without sufficient battery storage or other flexible generation sources, the system can face a gap between daytime renewable production and evening electricity requirements.
The September shortage therefore highlights a broader challenge for India’s rapidly growing economy: expanding generation capacity while ensuring reliable fuel supplies, stronger transmission networks, adequate storage and sufficient flexible power during peak periods.
For consumers and businesses, the immediate concern remains the reliability of supply. For policymakers and power companies, the data underlines the need to balance rising electricity demand with dependable generation and grid infrastructure as India continues its long-term energy expansion.
