- Peak demand met reaches 269.06 GW in Sept, up 17.4% y-o-y
- Coal supplies nearly 78% of additional generation as hydro output drops
India’s power system experienced unusually strong September demand in 2026 as deficient rainfall sustained cooling and irrigation requirements while constraining hydro generation. Coal and renewables increased output, but tighter electricity availability on the exchange kept spot prices elevated through most of the month.
Late-month rainfall brought substantial relief. However, the subsequent recovery in demand and prices indicated that the improvement was temporary.
Demand: summer-like pressure persists
Grid India’s daily operating data, monitored by BigMint, show that September’s demand increase extended well beyond a single exceptional day.
The monthly maximum, recorded on 10 September, exceeded September 2025’s highest level by 39.90 GW. Average daily maximum demand met increased by 29.09 GW.
Pressure was strongest during 1-10 September, when daily maximum demand met averaged 256.07 GW, up 23.0% y-o-y. This moderated to 247.54 GW during September 11-20 and 236.81 GW during the final 10 days.
Peak timing also shifted. All September 2025 daily national maxima occurred during evening or night hours, whereas 26 of September 2026’s 30 maxima occurred during daytime. This is consistent with stronger cooling and agricultural loads, while also allowing solar generation to support many peak periods.
These figures measure demand successfully met, rather than total requirements including unmet demand.
Generation: coal carried the incremental requirement
Generation increased by 17.44 TWh, with coal contributing 13.55 TWh, or 77.7% of the net increase. Coal’s share rose from 63.4% to 64.9%.
RES added 5.82 TWh, while nuclear and gas-based/liquid-fuel generation each added approximately 1.48 TWh. These gains also compensated for a 4.88 TWh hydro decline, equivalent to 36% of the additional coal output.
Hydro availability weakened progressively. Daily generation averaged 750 MU during September 1-10, declining to 664 MU during 11-20 September and 548 MU in the final 10 days. Its y-o-y shortfall widened from 10.2% to 29.6% across those periods.
Meanwhile, RES output fell from 1,108 MU/day in the first ten days to 839 MU/day in the next 10, before recovering to 1,001 MU/day. Coal consequently supported both rising requirements and variability in other sources.
IEX: buying interest increased, sell offers contracted
Purchase bids were four times sell offers, against 0.57 times a year earlier. Yet scheduled volume increased only 10%, highlighting the gap between buying interest and available exchange supply.
Higher national generation did not automatically translate into greater merchant availability, since much of the output serves contracted requirements. Purchase bids indicate market interest, rather than actual consumption or a measured national shortage.
Late rainfall reversed the market balance
During 1-23 September, purchase bids averaged 1,180 GWh/day against sell offers of 207 GWh/day. The highest daily average price reached INR 8.65/kWh on 16 September.
During 24-27 September, purchase bids fell to 330 GWh/day while sell offers increased to 528 GWh/day. Prices declined 64.3%, while scheduled volumes rose 82.5%. Lower national demand released more electricity for exchange trading.
The easing occurred without an immediate hydro recovery. Hydro averaged only 510 MU/day during these four days; softer demand and stronger RES output improved the balance.
Monsoon: demand pressure and supply constraints
The weather contrast was substantial. The 2025 southwest monsoon delivered 108% of normal rainfall, whereas 2026 ended 12.6% deficient, with September approximately 8% below normal.
Deficient rainfall can sustain cooling and irrigation loads while limiting hydro inflows. Simultaneously, localised heavy rain can disrupt coal production and transportation: a national deficit does not imply dry conditions everywhere. Contemporary reporting identified both weaker hydro and monsoon-related coal availability constraints.
IMD recorded heavy rainfall across several northern, central and eastern states around 25-26 September, coinciding with the demand and price correction.
BigMint assessment
September reinforced the quarterly pattern: Q3 generation rose 11.1%, coal increased 12.6%, RES expanded 32.3%, and hydro declined 19.5%. Renewable growth supported supply, but coal remained essential to meeting incremental requirements.
October may bring seasonal demand moderation, although IMD forecasts above-normal temperatures across much of India and below-normal national rainfall.
Sustained price relief will depend on softer demand alongside improved fuel and generation availability. September’s brief rainfall-driven reprieve shows that spot conditions can improve quickly — and tighten again just as rapidly.
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