The driest August in more than a century pushes power generation to a record 162.7 billion kilowatt hours.

India has increased the use of coal for power generation to avoid outages due to lower hydropower production as renewable energy expansion struggles to keep up with record power demand.

It is unusual for India’s electricity consumption to spike in August when temperatures are lower due to the annual monsoon between June and September. Demand typically peaks in May, when Indians turn on air conditioning to beat the heat and industry operates without rain-related disruptions.

However, the driest August in more than a century has seen power generation surge to a record 162.7 billion kilowatt hours (units), according to a Reuters analysis using data from grid operator Grid India.

According to a Reuters analysis of government data, coal’s share of electricity production rose to 66.7 percent in August – the highest this month in six years. Due to lower rainfall, hydropower’s share of total output fell to 14.8 percent, compared to 18.1 percent in the same period last year.

The government has repeatedly defended the use of coal, citing lower per capita emissions and increasing renewable energy production compared to richer countries.

Despite higher demand for coal, power plants slashed their imports by 24 percent to 17.85 million tons in the first four months of the fiscal year ended March 2024, government data showed, following a 10.7 percent increase in production by the state of coal India .

Lower imports from China, the world’s second largest importer of the polluting fuel, have kept global thermal coal prices low in recent months.

Analysts and industry representatives attribute the increased electricity use to farmers using more electricity to irrigate their fields because of insufficient rainfall, disrupted renewable energy and increased cooling needs amid warmer-than-usual temperatures.

“Given the already tight supply situation, as the weak August monsoon led to high agricultural demand, the sudden drop in wind power generation … has exacerbated the situation,” energy analysis firm EMA Solutions said in a LinkedIn post on Thursday.

India’s peak demand — the maximum capacity needed at any time of the day — rose to a record 243.9 gigawatts (GW) on Aug. 31, Grid India data showed, surpassing available capacity by 7.3 GW .

Data showed that power supply fell 780 million units short of demand in August, marking the highest shortage since April 2022, when India faced its worst power outages in six and a half years.

Weather authorities expect nationwide September precipitation to be in line with long-term averages, potentially giving utilities some breathing space.

Coal’s share of production rose to 74.2 percent in the eight months ended August, Grid India data showed, compared to 72.9 percent in the same period last year and is on course for the third annual increase in a row. Hydropower’s share fell from 10.9 percent to 9.2 percent.

Total electricity generation has increased by more than 108 billion units this year, dwarfing an increase of about 16 billion units in renewable energy generation.

India fell short of its goal of installing 175 GW of renewable energy by 2022 and has since said it will seek to increase non-fossil capacity – solar, wind, nuclear, hydro and bio – to 500 GW by 2030 .

Meeting that goal would require more than 43 GW of additional non-fossil capacity each year, nearly triple the average non-fossil capacity addition over the past two years through July.

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