Whalesbook
India Postpones Plant Maintenance to Cover Gas Shortage
India is delaying planned maintenance on about 10,000 MW of thermal power capacity for three months to ensure electricity supply. This comes as the country faces severe gas shortages that could disrupt power generation. Normally, around 20,000 MW of thermal capacity is maintained during this time. Piyush Singh, Additional Secretary in the Power Ministry, explained that half of this crucial upkeep is postponed to cover an estimated 8,000 MW gap from gas-fired plants. The move highlights India's reliance on thermal power, which provides over 75% of its electricity.
Increased Coal Reliance Amid Low Stockpiles
Deferring plant shutdowns offers immediate relief but means greater reliance on coal. Coal reserves currently last only 19 days, requiring constant monitoring and procurement. The government plans to add 3,500 MW of new thermal capacity. However, total coal needs for the fiscal year are now estimated at 906 million tonnes, up from 874 million last year. This rising demand shows coal's ongoing importance in India's energy mix, even as renewable energy goals advance. The Power Ministry has used Section 11 directives to force plants to run at full capacity, adding 4,000 MW but straining older equipment.
Renewables Grow, But Thermal Power Remains Key
Although thermal power is key, India's energy sector is changing fast with major renewable investments. By January 2026, non-fossil fuels made up 52.3% of total installed power capacity (271.96 GW out of 520.5 GW), with solar power leading at 140.60 GW. Yet, electricity generation still heavily relies on thermal sources, supplying about 70% in FY2025-26. This gap shows the difficulty in balancing unpredictable renewable energy with the constant need for power. Companies like Torrent Power, which can import its own LPG, operate in this challenging market. Torrent Power is valued at about ₹72,733 crore and has a P/E ratio of 22.48, higher than rivals NTPC Ltd (13.4x) and CESC Ltd (15.9x), suggesting investors see it at a premium.
Risks Mount as Plants Run Harder and Imports Strain Supply
Delaying thermal maintenance, though needed for gas shortages, carries significant risks. Running older units past their scheduled service could cause more breakdowns and faster wear. The current energy squeeze is worsened by West Asian geopolitical issues affecting LNG supplies, showing India's large reliance on imported fuels. India imports about 60% of its LPG, much of it via the Strait of Hormuz, a key vulnerability. Also, plans to cut coal power when solar output is high are delayed by issues with paying for plant upgrades. This could waste renewable investment, boost emissions, and raise power bills. Relying on coal while growing renewables is a major hurdle for India's 2070 net-zero goals. Some Coal India units saw production drops in FY26 despite higher demand, raising supply concerns, though supplies to power plants have been stable.
Sector Poised for Growth Despite Immediate Challenges
Despite current problems, India's power sector is set for major growth. Peak demand is expected to rise, forecasting 5%-5.5% growth in FY2027. The government stresses energy security and aims for 50% of installed capacity from non-fossil fuels by 2030, a target reportedly met early by June 2025 (52.3% by January 2026). Analysts are cautiously positive, predicting a neutral sector outlook for FY27 due to steady demand and investment in renewables and storage. The 2026-27 Union Budget also stressed energy security and clean energy production, showing ongoing government backing for the sector.