India solar curbs expose grid strain amid peak power demand

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India solar curbs grid strain

Highlights

India curtailed 4.2% of total solar generation, or 1.8 billion units, in July-August due to inadequate grid infrastructure amid rising renewables capacity.
Peak power demand reached 270 GW in July, while nearly half of coal plants had stocks below four days, increasing pressure on coal despite record solar output.
Solar generation rose 39% year-on-year in the September quarter, but coal still supplied two-thirds of electricity as hydropower output fell 20% due to El Nino.

Renewable curbs during summer demand surge

As reported by Reuters, citing the Centre for Research on Energy and Clean Air, India turns away nearly 1.8 billion units of renewable electricity in July and August, with about 4.2% of total solar generation not absorbed by the grid during the two months.

The findings point to inadequate transmission infrastructure at a time when the country is expanding renewable energy capacity to 500 gigawatts by 2030 from 304 GW now. CREA analysts say significant volumes of renewable electricity continue to be curtailed despite record renewable generation because of grid and operational constraints.

India also held back 14% of its solar power output between April and June, according to government data. The country's transmission network is struggling to keep pace with growth in green energy, particularly solar, which accounts for about 168 GW, or nearly a third of generation capacity, based on government figures.

Pressure on coal and implications for the power mix

The renewable curbs come as peak power demand touches 270 GW in July and coal inventories at power stations fall sharply, the think tank says. Nearly half of India's coal plants have stocks below four days of requirement early this month.

India adds renewable capacity rapidly over the past year, helping non-fossil sources account for more than half of installed power capacity. Solar generation rises 39% from a year earlier in the quarter ended September, while renewable generation excluding large hydro crosses 100 billion units for the first time.

Coal still remains the backbone of India's power system during the quarter, supplying about two-thirds of electricity despite record renewable output. Rising demand and a 20% decline in hydropower generation linked to the El Nino weather pattern are increasing reliance on fossil fuels, the report says.

In our earlier article on El Niño-driven inflation risks in Asia, we explained how extreme weather-linked supply shocks can add fresh pressure to prices and complicate central banks’ interest-rate decisions. We also noted that these disruptions can amplify existing strains from higher energy costs and geopolitical supply issues, making inflation expectations harder to keep anchored across the region.

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