Hormuz clash sharpens India's gas crunch as grid hits over 270GW peak
The power sector is particularly exposed. Under the government's LNG-rationing framework, electricity generation is a lower-priority sector.
The US carried out "self-defence" strikes after Iranian missiles, drones, and small boats targeted three US Navy ships transiting the Strait of Hormuz on the night of May 25. President Donald Trump claimed that the ceasefire was “still in effect”, but threatened further strikes if Iran did not agree to a deal.
The chokepoint matters far beyond the Gulf: roughly a fifth of the world's seaborne oil and a third of its LNG trade pass through Hormuz, and India is among the most exposed.
At home, the strain was already showing. India's peak power demand hit a record 270.82 gigawatts at 3.45 pm on May 21, a level the Central Electricity Authority's long-term resource adequacy plan had projected as the full-year ceiling for FY2026–27. That ceiling was touched within the first seven weeks of the plan year, after four consecutive daily records as a heatwave drove all 50 of the world's hottest recorded places into India. Nighttime outages of up to an hour have started in parts of the country.
The capacity milestone, and what it hides
Last July, the Union Ministry of New and Renewable Energy said India had reached its Paris Agreement target — 50 per cent of installed power capacity from non-fossil fuel sources — five years ahead of its 2030 pledge. Renewables now account for around 185 GW of installed capacity, the ministry said.
The milestone is real. It is also a capacity number, not a generation number. And the two have drifted apart. At the all-time peak minute on May 21, thermal plants supplied 62.8 per cent of actual load, solar 22 per cent, wind five per cent, and hydro 5.8 per cent. Renewables plus hydro therefore met just 34 per cent of the country's biggest power-demand minute on record.
Of the 2,030 TWh of electricity India produced in 2024, coal alone generated 1,518 TWh, or 75 per cent, according to the Energy Institute's Statistical Review of World Energy 2025. Solar, wind, and other modern renewables produced 241 TWh (12 per cent); hydro added 157 TWh (eight per cent). Natural gas, the cleanest of the dispatchable fuels, supplied just 56 TWh, under three per cent.
The 60-year picture
The world's energy budget is still mostly fossil. In 2024, coal, oil, and gas supplied 81 per cent of global primary energy, according to the Energy Institute. Coal alone provided 26 per cent. The shape has barely shifted in 60 years.
India's profile is more coal-heavy than the world's. Coal supplied 57 per cent of India's primary energy in 2024, more than double the global share. Meanwhile, gas accounted for just six per cent, against 25 per cent globally. India's total energy use has grown nearly 20-fold since 1965, from 613 TWh to 11,336 TWh. The renewable build of the last decade is visible in the chart, but only as the thin green band at the top of the stack.
Why Hormuz matters in Delhi
Last night's clash matters because India's gas-import map runs straight through Hormuz. Qatar, which until recently supplied about 40 per cent of India's LNG imports, has seen shipments slow as transit risks pushed up freight rates and insurance premiums.
Oman, India's second-largest supplier, has stepped in: its share has climbed from roughly 16 per cent to about 30 per cent of the import mix, helped by loading ports that sit outside the chokepoint. India has also doubled sourcing from Nigeria and Angola, and locked in new spot cargoes from the United States, Australia, Mauritania and Indonesia, according to traders tracking the redirection.
The power sector is particularly exposed. Under the government's LNG-rationing framework, electricity generation, refining, and petrochemicals are designated lower-priority sectors, first in line for curtailment when supply tightens. Gas-fired plants are the cleanest of the dispatchable fuels and would normally bridge the gap between solar's afternoon glut and coal's nighttime base. With that bridge being rationed, more of the after-sunset load is landing on coal.
Coal is being asked to absorb the shock. Stocks at thermal plants are tight, ministry data from earlier in the year put them at just over 23 days of consumption, already below the 30-day buffer the government targets, and reserves have been drawn down further as units have been pushed to run flat-out. The energy ministry has directed all coal plants to defer planned maintenance through May 27, when the current heatwave is expected to start easing.
The stress line is storage, not generation
The grid has held up better than many expected. The 270.82 GW peak was met in full, with no recorded system-wide unmet demand at the all-time high minute. What has changed is not the absolute peak but how fast the next peak arrives. The Central Electricity Authority’s annual demand projections have been beaten in three of the last four summers, and the FY26–27 ceiling has been hit in mid-May with three full months of summer to go.
Solar floods the grid through the afternoon. Coal then runs flat-out at night because battery storage has not scaled with the renewable build. Pumped hydro is growing but slowly. With LNG caught in West Asia's risk premium, the night load lands on coal. This is also why air quality has worsened even as temperatures climb past 45 degrees Celsius in north India.
The heatwave that has gripped much of India is set to weaken in the coming days, but the relief will be uneven.
Power demand will keep rising as summers intensify; the question is whether storage gets built fast enough to keep coal idle at night. India's renewable build has been a clear win. The next phase has to be won on storage. Without it, every heatwave becomes an argument for more coal, and the climate arithmetic gets worse every summer.
The US carried out "self-defence" strikes after Iranian missiles, drones, and small boats targeted three US Navy ships transiting the Strait of Hormuz on the night of May 25. President Donald Trump claimed that the ceasefire was “still in effect”, but threatened further strikes if Iran did not agree to a deal.
The chokepoint matters far beyond the Gulf: roughly a fifth of the world's seaborne oil and a third of its LNG trade pass through Hormuz, and India is among the most exposed.
At home, the strain was already showing. India's peak power demand hit a record 270.82 gigawatts at 3.45 pm on May 21, a level the Central Electricity Authority's long-term resource adequacy plan had projected as the full-year ceiling for FY2026–27. That ceiling was touched within the first seven weeks of the plan year, after four consecutive daily records as a heatwave drove all 50 of the world's hottest recorded places into India. Nighttime outages of up to an hour have started in parts of the country.
The capacity milestone, and what it hides
Last July, the Union Ministry of New and Renewable Energy said India had reached its Paris Agreement target — 50 per cent of installed power capacity from non-fossil fuel sources — five years ahead of its 2030 pledge. Renewables now account for around 185 GW of installed capacity, the ministry said.
The milestone is real. It is also a capacity number, not a generation number. And the two have drifted apart. At the all-time peak minute on May 21, thermal plants supplied 62.8 per cent of actual load, solar 22 per cent, wind five per cent, and hydro 5.8 per cent. Renewables plus hydro therefore met just 34 per cent of the country's biggest power-demand minute on record.
Of the 2,030 TWh of electricity India produced in 2024, coal alone generated 1,518 TWh, or 75 per cent, according to the Energy Institute's Statistical Review of World Energy 2025. Solar, wind, and other modern renewables produced 241 TWh (12 per cent); hydro added 157 TWh (eight per cent). Natural gas, the cleanest of the dispatchable fuels, supplied just 56 TWh, under three per cent.
The 60-year picture
The world's energy budget is still mostly fossil. In 2024, coal, oil, and gas supplied 81 per cent of global primary energy, according to the Energy Institute. Coal alone provided 26 per cent. The shape has barely shifted in 60 years.
India's profile is more coal-heavy than the world's. Coal supplied 57 per cent of India's primary energy in 2024, more than double the global share. Meanwhile, gas accounted for just six per cent, against 25 per cent globally. India's total energy use has grown nearly 20-fold since 1965, from 613 TWh to 11,336 TWh. The renewable build of the last decade is visible in the chart, but only as the thin green band at the top of the stack.
Why Hormuz matters in Delhi
Last night's clash matters because India's gas-import map runs straight through Hormuz. Qatar, which until recently supplied about 40 per cent of India's LNG imports, has seen shipments slow as transit risks pushed up freight rates and insurance premiums.
Oman, India's second-largest supplier, has stepped in: its share has climbed from roughly 16 per cent to about 30 per cent of the import mix, helped by loading ports that sit outside the chokepoint. India has also doubled sourcing from Nigeria and Angola, and locked in new spot cargoes from the United States, Australia, Mauritania and Indonesia, according to traders tracking the redirection.
The power sector is particularly exposed. Under the government's LNG-rationing framework, electricity generation, refining, and petrochemicals are designated lower-priority sectors, first in line for curtailment when supply tightens. Gas-fired plants are the cleanest of the dispatchable fuels and would normally bridge the gap between solar's afternoon glut and coal's nighttime base. With that bridge being rationed, more of the after-sunset load is landing on coal.
Coal is being asked to absorb the shock. Stocks at thermal plants are tight, ministry data from earlier in the year put them at just over 23 days of consumption, already below the 30-day buffer the government targets, and reserves have been drawn down further as units have been pushed to run flat-out. The energy ministry has directed all coal plants to defer planned maintenance through May 27, when the current heatwave is expected to start easing.
The stress line is storage, not generation
The grid has held up better than many expected. The 270.82 GW peak was met in full, with no recorded system-wide unmet demand at the all-time high minute. What has changed is not the absolute peak but how fast the next peak arrives. The Central Electricity Authority’s annual demand projections have been beaten in three of the last four summers, and the FY26–27 ceiling has been hit in mid-May with three full months of summer to go.
Solar floods the grid through the afternoon. Coal then runs flat-out at night because battery storage has not scaled with the renewable build. Pumped hydro is growing but slowly. With LNG caught in West Asia's risk premium, the night load lands on coal. This is also why air quality has worsened even as temperatures climb past 45 degrees Celsius in north India.
The heatwave that has gripped much of India is set to weaken in the coming days, but the relief will be uneven.
Power demand will keep rising as summers intensify; the question is whether storage gets built fast enough to keep coal idle at night. India's renewable build has been a clear win. The next phase has to be won on storage. Without it, every heatwave becomes an argument for more coal, and the climate arithmetic gets worse every summer.
