India is taking emergency measures to address electricity outages, including seeking additional volumes of natural gas and expediting power plant maintenance. These actions come in response to a record power demand in August, driven by dry weather conditions and a decline in hydro and wind energy output.

The Power Ministry has issued a note urging states to ensure that all gas-based power plants with power purchase agreements are operational during high-demand periods and non-solar hours. The ministry also emphasized the need to bring units under forced outage back into service as quickly as possible. Additionally, states are encouraged to expedite the commissioning of new renewable and thermal power plants.

This move could lead to increased demand for natural gas, potentially prompting India to seek more LNG cargoes on the spot market. India's LNG imports had declined for three consecutive financial years up to March 2023.

Power demand in India has been growing rapidly due to strong economic growth and increased household consumption. Coal remains the dominant source of power generation, accounting for over 73% of total generation, while renewable energy sources make up over 11%.

However, India faces challenges in maintaining its gas-fired capacity due to relatively high LNG prices. About half of India's 25 GW gas-fired capacity is non-operational. The share of gas-fired power in overall output has declined from over 3% in the last decade to less than 2% currently.

The Ministry noted that below-average monsoon rains are expected to result in lower hydroelectricity output in the coming months, adding stress to the overall power supply. While India's power grid has experienced minimal shortages during the day thanks to solar power, supply falls short of demand during the night, placing greater reliance on coal-fired generation.

These measures underscore India's efforts to balance its energy mix, reduce its dependence on coal, and address immediate power shortages.