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India-wide electricity generation rose 11.2% yoy to 178BU in May 2026, YTD up 8.4% to 344BU. Renewable generation grew 29.9% yoy, while thermal generation increased 8.8% yoy. Despite the rising share of renewables in the generation mix, thermal power continued to meet ~70% of total demand, highlighting its critical role in providing reliable round-the-clock power. India remained adequately supplied, with the energy deficit contained at just 0.1%, while energy supplied increased 10.7% yoy to 164BU in May. Peak power demand surged 17.2% yoy to 270GW, reflecting the impact of heatwaves, rising EV adoption, and India's broader electrification journey. Total installed capacity stood at 542GW as of May-26, up 14% yoy, led by renewable additions, which grew 29.1% yoy, underscoring India's ongoing transition toward cleaner energy sources. During the month, 1,600MW of coal, 300MW of hydro, and 3,190MW of renewable capacity were commissioned. Thermal PLFs remained healthy at 71%, with private IPPs leading utilization at 76%, while state utilities operated at a lower 64%.

Power demand surges; thermal still leads

Electricity generation surged 11.2% yoy to 178BU during May 2026, supported by extreme heatwaves and rising electricity demand. Thermal generation stood at 124BU (+8.8% yoy), nuclear at 6BU (+11.2% yoy), hydro at 13BU (-3.8% yoy), and renewables at 35BU (+29.9% yoy). Thermal power continued to account for ~70% of total generation owing to its round-the-clock supply capabilities. Within renewables, solar generation rose to 22BU (+50.8% yoy) while wind generation increased to 11BU (+7.4% yoy). Energy supplied grew 10.7% yoy to 164BU, with Andhra Pradesh (+21.2% yoy), Tamil Nadu (+27.0% yoy), Telangana (+20.2% yoy), and Maharashtra (+18.4% yoy) emerging as key demand drivers. Consequently, peak power demand increased 17.2% yoy to 270GW, with notable growth across Andhra Pradesh (+19.2% yoy), Telangana (+17.6% yoy), and Bihar (+14.0% yoy). Plant utilization levels remained healthy, with coal PLFs at 71.8%, lignite at 57.5%, and nuclear at 87.5%, while renewable PLFs remained lower at ~17%.

Solar leads capacity addition

To support rising demand, India's installed capacity expanded 14% yoy to 542GW, led by solar (+41.7% yoy), wind (+10.8% yoy), and hydro (+8.4% yoy). Western India continues to witness the strongest capacity additions, with non-thermal capacity in the region growing 24.7% yoy to 102GW.

Grid expansion lags targets

With only one month remaining in Q1FY27, transmission and transformation additions have achieved just 40.2% (5,034CKM) and 44.7% (41,394MVA) of their respective quarterly targets, highlighting a slower-than-required pace of grid infrastructure expansion. This assumes greater significance, given the rapid growth in renewable capacity and rising power demand across the country. During May, 1,121CKM of transmission lines and 7,190MVA of transformation capacity were added.

KTAs from meetings with CESC and Vedanta Power

Vedanta Power:

The management targets to expand thermal capacity from 4.2GW to 12GW by FY33, supported by Rs660bn of planned capex. EBITDA is guided to more than double from Rs15bn currently to Rs32.6bn by FY29, driven by the commissioning of the 600MW Sakti plant and lower fuel costs. Nuclear power is being evaluated as the next leg of growth.

CESC:

The management remains confident of delivering ~2x growth in consolidated PAT by FY30 from FY25 levels, driven by improved distribution efficiencies, lower franchise losses, and increasing renewable contribution. The company has outlined a Rs300bn capex plan to scale renewable capacity from ~300MW currently to 3.2GW by FY29 and 10GW by 2032, along with distribution capex across all existing franchises over five years, while pursuing opportunities across multiple states leveraging its strong operational track record.

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