India May Use Gas Plants Only During Summer Peaks

29 Aug 2025 CW Team

The share of gas in the country’s electricity generation has dropped to approximately 1.5 per cent, down from 3 per cent in 2020, as global gas prices surged to around USD 12 per million British thermal units, fluctuating between USD 8 and USD 18 over the past two years. This makes gas-based generation significantly more expensive compared to alternatives, especially coal-fired plants, which currently account for nearly 75 per cent of India’s power mix. Meanwhile, India is actively seeking to expand its renewable energy footprint.

Ghanshyam Prasad, Chairman of the Central Electricity Authority, speaking at the Indo-American Chamber of Commerce Energy Summit in New Delhi, did not elaborate on the specific mechanisms for supporting gas-based power. However, he noted that the government, in May, had formulated a 100-day plan to prepare gas plants for emergency operation during peak periods. This plan includes a contract framework to cover start-up expenses and absorb fluctuations in gas prices.

Due to prolonged inactivity stemming from high gas costs, several gas plants have been deemed non-operational. Consequently, the government has revised the grid-connected capacity of gas-based power plants from 25 gigawatts to 20 gigawatts. Of this, around 13–14 GW was operational during the peak demand window last year.

This year, however, heavy monsoons, lower cooling demand, and a general economic slowdown have moderated the country’s overall electricity requirement. While peak demand was forecast at 270 GW, it reached only 242 GW, limiting the necessity for large-scale gas-based generation.

This shift reflects India's ongoing balancing act—meeting seasonal demand spikes while managing costs and emissions, and gradually pivoting toward more sustainable energy sources.

India is considering restricting the use of gas-fired power plants solely to the high-demand summer months of May and June, owing to the relatively high cost of natural gas, an adviser to the Ministry of Power stated on Tuesday.The share of gas in the country’s electricity generation has dropped to approximately 1.5 per cent, down from 3 per cent in 2020, as global gas prices surged to around USD 12 per million British thermal units, fluctuating between USD 8 and USD 18 over the past two years. This makes gas-based generation significantly more expensive compared to alternatives, especially coal-fired plants, which currently account for nearly 75 per cent of India’s power mix. Meanwhile, India is actively seeking to expand its renewable energy footprint.Ghanshyam Prasad, Chairman of the Central Electricity Authority, speaking at the Indo-American Chamber of Commerce Energy Summit in New Delhi, did not elaborate on the specific mechanisms for supporting gas-based power. However, he noted that the government, in May, had formulated a 100-day plan to prepare gas plants for emergency operation during peak periods. This plan includes a contract framework to cover start-up expenses and absorb fluctuations in gas prices.Due to prolonged inactivity stemming from high gas costs, several gas plants have been deemed non-operational. Consequently, the government has revised the grid-connected capacity of gas-based power plants from 25 gigawatts to 20 gigawatts. Of this, around 13–14 GW was operational during the peak demand window last year.This year, however, heavy monsoons, lower cooling demand, and a general economic slowdown have moderated the country’s overall electricity requirement. While peak demand was forecast at 270 GW, it reached only 242 GW, limiting the necessity for large-scale gas-based generation.This shift reflects India's ongoing balancing act—meeting seasonal demand spikes while managing costs and emissions, and gradually pivoting toward more sustainable energy sources.

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