India Likely To Face Potential Evening Power Shortages by 2027 Due to Rising Electricity Demand, Warns IECC
India is likely to experience significant evening power shortages by 2027, ranging between 20 and 40 Gigawatt (GW), even if all currently under-construction thermal and hydro capacity becomes functional as planned, according to the India Energy and Climate Center (IECC).
New Delhi, July 31: India may experience significant evening power shortages by 2027, ranging between 20 and 40 gigawatts (GW), even if all currently under-construction thermal and hydroelectric capacity becomes functional as planned, according to the India Energy and Climate Center (IECC).
The IECC further said that if electricity demand continues to grow at an annual rate beyond 6 per cent, India will face evening power shortages by 2027. It observed that India's electricity demand grew by 7 per cent in 2023, significantly outpacing the global average of 2.2 per cent. Between May 2019 and May 2024, India's peak electricity demand surged by 68 GW, from 182 GW to 250 GW, marking an annual growth rate of 6.5 per cent. Hiring in India for Power and Energy Sectors Surging 9% in H1 FY25, Suggesting Move Towards Low-Carbon Future: Report.
The country met a record maximum power demand of 250 GW on May 30 this year. The post-COVID period saw an even more dramatic increase in demand, with peak levels jumping by 46 GW in just two years, from 204 GW in May 2022 to 250 GW in May 2024. Interestingly, the report mentioned that during a recent heat wave from May 17 to May 31, 2024, India's power system faced significant stress.
Despite having over 140 GW of renewable energy (RE) capacity (excluding large hydro), only 8-10 GW of RE generation was available during evening peak periods in early May 2024. India's power sector is poised for robust growth in the fiscal year 2025, with expectations of a healthy demand surge at approximately 6.0 per cent this fiscal. The report highlighted the urgent need for policy intervention to avert these shortages. It suggested that deploying storage solutions combined with solar power could mitigate the risk. India's Power Sector Anticipates Healthy Growth in FY2025: Demand to Remain Strong at Approx. 6.0 Pc.
Evening peaking RE would be critical for increasing deployment by states and could work alongside technology-neutral procurement obligations for utilities. The report also recommended achieving a solar-plus-storage cost target of Rs 3/kWh by 2027, noting that SECI (2024) auctions are already at Rs 3.41/kWh. Additionally, it advised avoiding inefficient thermal investments and focusing on energy arbitrage and ancillary services to ensure a stable power supply.
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