El Nino conditions can increase cooling needs while reducing hydropower availability, providing a further boost to coal consumption, says IEA
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India’s power demand momentum is expected to sustain its rally during September led by a fast growing appetite for cooling systems as strong El Nino conditions are likely to result in below-normal rains and above-normal temperatures in most parts of the country.Sources said the current month is expected to follow July and August, which registered record consumption, as hot weather and humidity pushed up demand for cooling leading to higher power consumption. This will also push up coal burn at thermal power plants (TPPs).Key reasonsAmong the key reasons behind rising electricity consumption during July-August is the sustained high temperature and humidity levels during the evening and night hours. This phenomenon is expected to persist in September, explained one of the sources.India consumed a record 171 billion units (BU) in July 2026, which is the highest for any month on record. This was followed by a demand of 169 BU in August is also the highest for the month, as per Crisil Intelligence.“This month power usage will remain high, albeit not at the levels of July-August. El Nino is not just pushing up maximum and minimum temperatures but also impacting rainfall. So, demand is expected to remain high during the day and night. This will also push up coal consumption,” said another source.Power demand data also point towards sustained high consumption. For instance, India’s daytime peak electricity demand averaged at 254.63 gigawatts (GW) during the first nine days of September, which is higher than the peak demand of 250 GW (day) in May 2024. Similarly, the demand during evening peak hours averaged at 231.09 GW, which is also higher than the peak demand (day) of 230.60 GW in September 2024.Coal consumptionThe International Energy Agency also expects higher coal burn in India by thermal power plants during 2026 citing that El Niño conditions can heighten cooling demand. This is also likely to push up India’s coal consumption by 4.2 per cent Y-o-Y to 1,353 million tonnes (mt) in the current calendar year.On Thursday, the agency said that coal demand in India is expected to return to its historical growth trend in 2026, following last year’s temporary decline. Rising electricity demand will continue to support coal use in the power sector, despite the rapid expansion of renewable capacity.“El Nino conditions can increase cooling needs while reducing hydropower availability, providing a further boost to coal consumption. Industrial demand also remains strong, underpinned by growth in pig iron, direct reduction of iron (DRI) and cement production, the three largest coal-consuming sectors,” it anticipated.Coal stocks at TPPs fell nearly 29 per cent in just over a month, from 38 mt at end-July to 27.14 mt on September 4, as supply disruptions coincide with sustained power demand. To replenish stocks, the Coal Ministry said that Coal India’s average daily coal production has risen from around 1.36 mt during the first three rain-affected days of September to around 1.83 mt on September 6. Coal stocks at power plants stood at 25.84 mt against a daily requirement of around 3.12 mt on September 9.Last week, the World Meteorological Organization (WMO) said that El Nino is firmly established and will intensify into a very strong event in the coming months. WMO Forecasts also show a near 100 per cent likelihood that it will persist through February 2027.The Indian Meteorological Department (IMD) has said that many parts of the country are likely to receive below-normal rainfall, except some areas of Northwest, Northeast, East, East-central India and isolated areas of Southeast Peninsular India may receive normal to above-normal rainfall.Similarly, the weatherman has also predicted that the monthly average maximum and minimum temperatures will be above normal for most parts of the country.Published on September 10, 2026
