India’s Power Generation to Dip 0.6% in June Quarter 2025

India’s power generation is projected to decline by 0.6% in the June quarter of 2025, primarily due to a slump in thermal output. Despite rising electricity demand driven by heatwaves, challenges in coal-based power production and grid constraints are impacting supply. This decline raises concerns about meeting peak consumption needs, especially as the country pushes for renewable energy integration to achieve its 2070 net-zero goal.

India’s power sector, a critical component of its economy, faces a projected 0.6% drop in generation for the April-June 2025 quarter, marking the first decline in three years. Thermal power, which accounts for 70% of India’s electricity, is the primary contributor to this dip, driven by reduced coal output and operational inefficiencies. Coal stocks at thermal plants, while sufficient at 51 million tonnes for 21 days as of February 2025, face logistical bottlenecks in transportation, particularly during monsoons.

Electricity demand has surged due to extreme heat, with peak consumption reaching 270 gigawatts in April 2025, compared to 250 gigawatts in 2024. The India Energy & Climate Center estimates that room air conditioners alone could add 180 gigawatts to peak load by 2035 without interventions. This demand spike strains the aging grid, leading to curtailment losses in renewable energy integration, particularly for wind and solar.

The government has prioritized clean energy, with 46 gigawatts of wind and 82 gigawatts of solar capacity installed by 2025. However, renewable sources struggle to offset the thermal decline due to grid limitations and variability in output. The Ministry of Power is invoking Section 11 of the Electricity Act to ensure supply, mandating plants to operate at full capacity. Investments in grid upgrades, estimated at $20 billion by 2030, are underway to support the 500-gigawatt non-fossil fuel target.

Challenges include coal supply chain disruptions and inadequate transmission infrastructure. States like Gujarat and Tamil Nadu, key renewable energy hubs, face land acquisition issues for new projects. The government is promoting public-private partnerships to modernize the grid and incentivize green energy through schemes like PM Surya Ghar. Despite these efforts, short-term supply gaps could impact industrial output and urban areas, where power cuts are already reported.

The decline highlights the need for diversified energy sources. Nuclear power, currently at 7.5 gigawatts, is being expanded, with plans for 13 gigawatts by 2030. Energy efficiency measures, such as the India Cooling Action Plan, aim to reduce demand through passive cooling and climate-smart housing. These steps align with India’s commitment to reduce carbon intensity by 45% by 2030, but scaling solutions requires addressing skill gaps and financing barriers.

Conclusion

The 0.6% dip in India’s power generation for June 2025 underscores the challenges of balancing rising demand with a transitioning energy mix. While thermal output slumps, renewable energy faces integration hurdles. Strategic investments in grid infrastructure and diversified sources are essential to ensure energy security and support India’s net-zero ambitions.

Source: Outlook Business