India's electricity system achieved another significant milestone in July 2026, with power demand surging 10.9% year-on-year to around 171 billion units (BU), marking the highest recorded monthly demand, according to a Crisil Intelligence report. The month also witnessed the second-highest peak power demand on record at 270 gigawatts (GW), which was approximately 22% higher than the peak of 221 GW recorded in July last year. For the April-July period, India's power demand increased 9.1% year-on-year this fiscal against -0.5% last fiscal. The sharp rise was primarily driven by El Niño-triggered rainfall deficit that boosted demand for cooling equipment, with India receiving 15% below-normal rainfall between June 1 and July 29, as reported by Crisil Intelligence.
The supply-demand imbalance became increasingly pronounced during July, with peak electricity demand standing at 255,172 MW while supply reached only 252,127 MW, creating a critical shortfall of 3,045 MW. According to the Crisil Intelligence report, this gap represented a significant escalation from the 1,225 MW shortfall in April and 1,326 MW gap in May. The northern region accounted for the largest share of the June shortfall, with evening peak demand of 95,919 MW against supply of 93,269 MW, leaving a gap of 2,650 MW. As per the government's response, El Niño conditions had led to a significant increase in electricity requirements across the country, with the trend in peak demand and sensitivity of short-term market prices to temperature variations remaining key watchpoints going forward.
State-level figures for July revealed significant regional variations in power supply gaps, with states experiencing higher rainfall deficits recording sharper demand increases. Crisil Intelligence highlighted that Karnataka recorded a rainfall deficit of 27-29%, which led to a 21% year-on-year increase in power demand, while Rajasthan's rainfall deficit was at 10-20%, resulting in a 23% rise in demand. Bihar experienced the most severe shortfall with evening peak demand of 8,702 MW against supply of 7,784 MW. Maharashtra recorded a demand of 32,193 MW against supply of 31,338 MW, while Punjab's evening peak demand of 12,812 MW was met by 12,352 MW. However, Uttar Pradesh established a new national benchmark by successfully meeting a peak power demand of 32,673 MW on June 24, 2026, surpassing major industrial states including Maharashtra, Gujarat, Tamil Nadu and Karnataka in meeting electricity demand.
The power generation landscape underwent notable changes during July 2026, with thermal power maintaining dominance while renewable energy showed strong growth. Crisil Intelligence reported that India's power generation increased 10% year-on-year to 182 billion units (BU) in July, tracking the rise in power demand. Coal-based generation increased 15% year-on-year, with its share in total generation rising to 64% in July from 62% in the same month last year. Renewable energy generation increased around 10% year-on-year, mainly driven by capacity additions, with India adding 13.2 GW of RE capacity, including small hydro, in the first quarter of FY2026-27. However, hydropower generation declined around 14% due to weak rainfall conditions. India's electricity demand has expanded significantly over the past few years, with peak demand increasing from about 190 GW in 2020-21 to nearly 250 GW in 2024-25, recording a CAGR of 7.06%.
Looking ahead, the government has outlined ambitious storage capacity expansion plans to support renewable energy integration, as reported by Crisil Intelligence. Under the National Electricity Plan, installed generation capacity is projected to reach 874 GW by 2031-32. Peak electricity demand is expected to grow at a CAGR of 5.58% between 2024-25 and 2035-36, reaching 459 GW by 2035-36. The government has taken several measures to ensure reliable power supply during summer months, including issuing directions for Tata Power's Coastal Gujarat Power Limited 4,000 MW plant operation from April 1, 2026, and deferring planned maintenance of thermal power plants to make an additional 10,000 MW of generation capacity available. India's installed generation capacity had reached 548.86 GW as of June 2026, with 324.7 GW of capacity added since April 2014. Government projections envisage the addition of about 39.88 GW of battery energy storage capacity and 10.95 GW of pumped-storage capacity during FY2027-28 to FY2029-30.
