India's Electricity Generation Rises 11% in Q2 FY27, Non-Fossil Sources Contribute

Total electricity generation in India rose by 11% year-on-year to 536 billion units (BU) during July-September. This period also marked the first time renewable power output surpassed 100 BU in a single quarter, reaching 101 BU, excluding large hydropower.

Combined generation from non-fossil sources, which includes renewables, large hydro, and nuclear power, increased to a record 177 BU from 163 BU in the previous year. Non-fossil sources accounted for approximately 33% of the total electricity generation in the quarter. Solar generation saw a 39% increase year-on-year to 51 BU, while wind generation grew by 29% to 45 BU. Solar power contributed 10% of India's total electricity generation for the first time during this quarter.

Capacity and Utilization

India's installed power capacity reached 555 GW in August 2026, with non-fossil sources making up about 55% of the total. Renewable capacity, excluding large hydro, stood at 243 GW, including 168 GW of solar capacity. Renewable capacity additions outpaced thermal additions in Q2 FY27, with approximately 7 GW of renewable capacity added compared to 0.8 GW of thermal capacity.

Despite a record peak demand of 270 GW, coal power plant utilization was 68% in the second quarter, a decrease from 73% in the preceding quarter.

Tamil Nadu Power Distribution Corporation Secures High-Cost Power Deals Amid Supply Shortage

The Tamil Nadu Power Distribution Corporation (TNPDCL) has entered into agreements to procure power at the highest rates it has ever paid. These deals aim to bridge the gap between power availability and demand for the rest of October. The utility has secured 1,500 megawatts (MW) of round-the-clock power supply from October 12 to 31, with prices ranging from ₹31.99 to ₹34.49 per unit. An additional 2,000 MW to meet evening peak demand (6 pm to midnight) will cost between ₹33.37 and ₹37 per unit.

TNPDCL officials attributed the need for these purchases to a nearly 4,000 MW shortage from central generating stations due to scheduled annual maintenance and reduced wind power generation. This coincides with an unprecedented power demand in October. Peak demand has reached 20,000 MW, with daily consumption approximately 70 million units higher than the previous year.

The high-cost agreements are primarily with gas-based plants, as coal power is not available in the market. An official noted that these contracts allow TNPDCL to pay only for power purchased, with low fixed charges, offering flexibility if demand decreases.

Small Modular Reactors Eyed for India's Steel Decarbonization

Small modular reactors (SMRs), which are being developed under India's Nuclear Energy Mission, show promise for the steel sector. These SMRs are expected to provide reliable, round-the-clock, low-carbon electricity, complementing renewable energy sources and supporting the steel industry's decarbonization efforts as the technologies mature and are deployed.

India's steel industry is expanding, with domestic demand driven by infrastructure spending. The country's crude steel output increased by 10% in 2025 and 6% in January-August 2026, while global output declined. India's share of world steel production has reached approximately 9%, up from 5.2% in 2014. Finished steel consumption in India more than doubled over a decade, reaching 164 million tonnes in FY26, with consumption exceeding production for two consecutive years.

The growth in steel production requires advancements in raw-material security, specialized manufacturing, technological sophistication, and environmental performance. Expanding scrap-based steelmaking and utilizing renewable electricity are also practical priorities for the sector.