India’s electricity generation rose 11 per cent year on year to 536 billion units (BU) in the second quarter (Q2) of the financial year 2026-27 (FY26), while peak power demand hit a record 270 gigawatts (GW), 18 per cent higher than the corresponding quarter a year ago. Renewable electricity generation, excluding large hydropower, crossed 100 BU for the first time, even as coal stocks at power plants fell to 21 million tonnes by September 30, just 36 per cent of the normative requirement.
According to the latest India Energy Snapshot for Q2 FY27, by the Centre for Research on Energy and Clean Air (CREA), combined non-fossil electricity generation, including renewables, hydropower and nuclear power, reached a record 177 BU, up from 163 BU in Q2 FY26. However, coal and lignite continued to dominate the electricity mix, accounting for 351 BU, or around 66 per cent of total generation.
The report’s findings, based on data from GRID-INDIA, the Union Ministry of Coal, the Central Electricity Authority and the National Power Portal, come as India’s electricity demand continues to grow and the generation mix changes. Peak demand reached 270 GW on July 16, 2026, compared with 230 GW in Q2 FY26. Uttar Pradesh and Maharashtra recorded the highest state-level peak demand at 27 GW each, followed by Gujarat at 23 GW, Tamil Nadu at 20 GW and Karnataka at 16 GW.
In Q2, solar remained the fastest-growing major source of electricity, with generation increasing 39 per cent year on year to 51 BU. Wind generation rose 29 per cent to 45 BU, while nuclear generation increased 26 per cent. Solar accounted for 10 per cent of total electricity generation for the first time and reached a daily record of 705 million units (MU) on September 30.
Renewable sources accounted for 19 per cent of total electricity generation, while non-fossil sources, including large hydropower and nuclear, contributed around 33 per cent. Solar accounted for 58 per cent of the increase in renewable electricity generation during the quarter.
Large hydropower generation, however, declined 20 per cent year on year, despite increasing 53 per cent quarter on quarter from 39 BU in Q1 FY27 to 60 BU in Q2. Coal and lignite generation rose 12.5 per cent year on year, from 312 BU in Q2 FY26 to 351 BU in the latest quarter.
Coal supply chain faces pressure as stocks decline
Coal consumption at power plants remained around 79 million tonnes per month from June through September, but supplies failed to keep pace. Coal dispatch to power plants declined from 74 million tonnes in May to 66 million tonnes in August, the lowest level of 2026 reported in the assessment.
Average freight train rake loading of coal to the power sector also fell from around 290 rakes per day in June to 280 in August. Although loading increased sharply in early September, reaching 444 rakes on September 6, coal stocks continued to decline.
By September 30, coal stocks at power plants had fallen to 21 million tonnes against a normative requirement of 58 million tonnes. The number of plants holding stocks below 25 per cent of their normative requirement increased from 32 on August 22 to 84 on September 30, reaching 85 on October 1.
The report also found that coal production followed its usual seasonal pattern, increasing 7.6 per cent year on year in July before declining 4.3 per cent in August. August 2026 recorded the lowest monthly coal production so far that year.
Despite the record national peak demand, coal power plants operated at a plant load factor (PLF) of 68 per cent in Q2 FY27, compared with 62 per cent in the corresponding quarter of the previous financial year and 73 per cent in Q1 FY27. PLF measures the electricity generated by a plant relative to the maximum it could produce over a given period.
“Even with national peak demand reaching a record 270 GW, India's coal power plants only reached 68 per cent of their utilisation rate in Q2 FY27,” said Manoj Kumar, India Analyst at CREA.
“As solar increasingly meets daytime electricity demand and storage helps meet evening and nighttime peaks, new thermal capacity should be assessed against expected demand, renewable generation, and storage availability,” he said. This, he added, would help avoid building capacity that could remain underutilised as the power system evolves.
Renewable capacity additions outpace thermal power
India’s installed power capacity reached 555 GW by the end of August 2026, up 12 per cent from August 2025, 23 per cent from August 2024 and 31 per cent from August 2023. Non-fossil sources accounted for around 55 per cent of installed capacity. Renewable energy capacity, excluding large hydropower, reached 243 GW, or 44 per cent of the total, compared with 193 GW in August 2025 and 81 GW in August 2019.
Solar capacity stood at 168 GW, accounting for 30 per cent of total installed capacity, while wind capacity reached 59 GW. Large hydropower capacity stood at 52 GW, nuclear at 8.8 GW and gas at 19 GW. Coal and lignite capacity totalled 231 GW, accounting for 42 per cent of installed capacity, down from 56 per cent in 2019.
Renewable energy additions also outpaced thermal additions during Q2 FY27, with around 7 GW of renewable capacity added against 0.8 GW of thermal capacity. At the same time, 648 megawatts (MW) of thermal capacity were retired, comprising 440 MW of coal-based capacity at Tanda Thermal Power Station Unit 1 and 208 MW of gas-based capacity at Godavari Combined Cycle Power Plant.
Despite these changes, 44 GW of coal-based capacity remained under construction as of August 2026. The central sector accounted for 21 GW, or 47 per cent, of this pipeline, followed by the private sector with 13.6 GW, or 31 per cent, and state utilities with 9.8 GW, or 22 per cent. Nearly 40 GW, or 90 per cent, of the under-construction coal capacity was at less than 50 per cent completion.
Storage expands, but renewable power curtailment persists
India had around 9.1 gigawatt-hours (GWh) of operational battery energy storage systems (BESS) as of the assessment, with another 3 GWh expected to be commissioned by December 2026. By August 2026, tenders had been issued for approximately 290 GWh of energy storage capacity, including 142 GWh of pumped storage projects and 151 GWh of BESS. During nighttime peak demand, storage contributed up to 5.5 GW, compared with 4.1 GW in the previous quarter, meeting around 1 to 2 per cent of national electricity demand.
However, grid and operational constraints continued to limit the use of renewable electricity. Around 1,835 MU of renewable generation was curtailed during July and August, comprising 1,462 MU of solar power and 373 MU of wind power.