India's electricity demand peaked at about 242 gigawatts in June 2025, according to the power ministry, and was met with no shortage. That is below the all-time record of about 250 GW set on 30 May 2024 during a severe heatwave, and well below the 277 GW that the Central Electricity Authority had projected for the 2025 summer.
The shortfall against projections was weather-driven. Rain arrived early and was widespread across much of the country during May and June, including unseasonal showers in the north and an early onset of the south-west monsoon. Cooler temperatures reduced demand for air conditioners, coolers and fans, which have become the single largest driver of India's summer electricity peaks.
Cooling load drives the peak
India's power demand has been rising quickly for years, driven by economic growth, urbanisation, the electrification of households and the spread of cooling appliances. Air conditioner ownership remains low by international standards but is growing rapidly, and each heatwave pushes the system to new limits. The 2024 record came during one of the longest heatwaves in India's recorded history across large parts of the north.
The relationship between temperature and demand is now so strong that a cooler or wetter summer can hold peak demand flat or below the previous year, as happened in 2025. The Central Electricity Authority's chairman said in August that peak demand was unlikely to reach the projected 277 GW for the year because of intermittent rains, according to Business Standard and ET EnergyWorld.
What it meant for supply
In 2024, the grid operator relied heavily on coal plants, imported coal and emergency measures to meet the record peak, including requiring imported coal-based plants to run at full capacity and deferring maintenance. In 2025, lower demand eased pressure on the system. Coal stocks at power plants were higher, and the system had more spare capacity.
India has also added large amounts of solar capacity, which helps meet daytime demand. The evening peak, after sunset, remains the main challenge, because cooling load continues into the night while solar output falls to zero. Battery storage, pumped hydro and gas-fired generation are the main options for meeting evening demand, and India has launched tenders for battery storage and pumped hydro to address it.
Hydropower output depends on rainfall and snowmelt. The early monsoon in 2025 supported hydro generation in some regions, which reduced the need for coal during the peak months.
Coal market effects
Lower power demand in the summer of 2025 reduced India's coal consumption relative to forecasts. Coal India and private miners had increased output, and stocks built up at mines and power plants. Imports of thermal coal for blending were lower than in 2024. For seaborne coal markets, particularly Indonesian and South African coal, India's demand is a key variable, and a cooler summer in India weakens prices.
The International Energy Agency and other forecasters still expect Indian coal demand to grow over the rest of the decade, because electricity demand is rising faster than renewable additions can cover in all hours. The 2025 summer was a reminder that weather can shift annual demand by significant amounts.
The climate signal
The contrast between 2024 and 2025 shows the year-to-year variability in Indian weather, which is driven by the monsoon, El Niño and La Niña patterns, and longer-term warming. India's Meteorological Department has recorded rising average temperatures and more frequent heatwaves over recent decades. Planners must therefore prepare for summers like 2024, even in years when demand turns out lower.
The Central Electricity Authority's projections for peak demand assume continued growth, reaching much higher levels by 2030 and beyond. Meeting those peaks requires adding generation, storage and transmission capacity years in advance, which means planning for hot years rather than average ones. A cooler summer can create a temporary surplus, but it does not change the long-term trend.
Distribution and affordability
Distribution companies in several Indian states face financial pressure because tariffs do not cover costs and because of high losses. A summer with lower peak demand can ease short-term power purchase costs, as utilities need to buy less expensive power from exchanges during peak hours. Lower demand on hot evenings typically means lower clearing prices on the power exchanges, which distribution companies use to cover shortfalls.
Heatwaves also affect distribution networks directly. Transformers and lines overheat and fail when demand surges in high temperatures, leading to local outages even when national supply is adequate. Many states have invested in network upgrades to handle higher loads.
Data centres join the demand picture
A newer source of load is starting to appear in Indian demand forecasts. Data centre capacity has been growing in Mumbai, Chennai, Hyderabad and the National Capital Region, driven by cloud providers, domestic digital services and data localisation rules. Data centres draw power around the clock, so they add to baseload rather than to the weather-driven summer peak, but they also need cooling, and their cooling load rises on hot days. Several state governments have offered incentives, including power tariff concessions and open access to renewable supply, to attract data centre investment. For grid planners, data centres add a steady block of demand in specific urban clusters, which can strain local substations even when national supply is adequate.
Policy responses to heat
India's government and several states have heat action plans that include measures such as adjusting working hours and providing water and shade. In the power sector, the government has encouraged the use of more efficient air conditioners through appliance standards and has discussed setting a default temperature range for new air conditioners to reduce peak load.
The government has also directed states to ensure adequate supply during summer months, including through advance procurement and the use of imported coal-based plants. The experience of 2024 led to a more cautious approach to planning in 2025.
What to watch
The rest of the monsoon season will determine hydro output and the level of coal stocks heading into the autumn. The next test for peak capacity will be the summer of 2026, and planners will be watching for signs of El Niño, which tends to bring hotter and drier conditions to India. Progress on battery storage tenders and transmission projects will determine how well the system can handle evening peaks in future hot summers.