The impact of the El Niño weather phenomenon was acutely felt across India's power sector in 2026. During the typical peak hydropower generation period of June to October, output fell by a significant 16%. This shortfall placed immense pressure on thermal power plants, which stepped up to generate the necessary electricity to maintain grid stability across the nation.
Hydropower Generation Suffers
Analysis of electricity generation data highlights the direct consequences of the rainfall deficit. Hydropower, which usually peaks during the monsoon months, saw a substantial decline. Nikit Abhyankar, faculty at the University of California, Berkeley, noted that this year's data clearly reflects the El Niño effect, with thermal generation entirely compensating for the reduced hydro output.
India's southwest monsoon, which concluded on October 15, recorded a 15% rainfall deficit nationally. Key hydropower-generating states like Maharashtra, Gujarat, and Rajasthan experienced particularly large shortfalls. Despite the seasonal variations inherent in hydro and wind power, the overall national power generation remained stable due to the increased reliance on thermal sources.
Coal Stock Challenges Persist
The heightened demand for thermal power has strained coal supplies. Despite record-high coal loading by Indian Railways throughout the monsoon season, coal stocks at many thermal power plants remained critically low. Railways reported over 22% growth in coal loading in October 2026 compared to the previous year, dispatching an average of 430 coal rakes per day in the first half of FY 2026-27.
This sustained pace of coal transportation was a direct response to rising energy consumption, driven by increased industrial production and the need to compensate for deficient rainfall. Thermal plants are burning more coal to ensure round-the-clock electricity, particularly during non-solar hours when market prices surged by 71% year-on-year in September 2026.
Rising Power Demand
Beyond industrial needs, the residential sector also contributed significantly to the surge in electricity demand. Accounting for approximately 25% of total electricity usage, residential consumption has grown at an annual rate of 6% since 2024-25. High cooling needs, especially for air conditioners and refrigerators, are a major factor, with residential electricity usage rising from 256 TWh to 409 TWh over the past decade.
A report by the Bureau of Energy Efficiency (BEE) and CLASP emphasized the need for enhanced energy efficiency standards. With urbanization and rising incomes expected to further increase appliance adoption, stricter Minimum Energy Performance Standards (MEPS) for high-impact cooling devices are recommended to manage future electricity demand growth effectively.