Riding the Heatwave: How India’s Power Sector is Set to Surge in Summer 2025
A record-hot season is on the horizon—here’s why energy giants stand to gain!
One sector that’s witnessing growing price momentum for the past week, thanks to the weather developments (forecasts of heatwaves) we have seen of late in India is the power sector. In this post we discuss these developments in detail, along with the companies that are best set to reap the benefits of a hot summer.
Let’s begin with what these developments are!
The Indian Meteorological Department (or IMD), which typically releases its first long-range forecast for the summer season (March-May) in early March, just released its forecast for summer for March to May 2025.
As you may read in the document, the IMD predicts that summer 2025 (March to May) will be hotter than usual across most of India. Specifically, the temperatures will be higher than normal (e.g., 38-42°C instead of 35-40°C) in most places, except the far south (like Tamil Nadu, Kerala) and some northeast areas, where it’ll be normal or cooler. Nights will also be warmer than usual (e.g., 25-28°C instead of 23-25°C) almost everywhere, except the deep south.
Also, there will be more days when it feels extra hot (above 40°C for several days), especially in central India (like Madhya Pradesh), northwest (like Rajasthan, Gujarat), and parts of the east (like Bihar). The south, far north, and northeast will see fewer heatwaves.
What does this hot weather mean? Well, it simply means people use more electricity for air conditioners, fans, and coolers, especially in big states like Uttar Pradesh, Rajasthan, and Madhya Pradesh. For example, if temperatures hit 42°C in Delhi or 45°C in Rajasthan (4-5°C above normal), demand jumps by 10-15 GW because every house and office turns on cooling. Warmer nights mean this use doesn’t stop at sunset.
Now, that’s about heat. But what about rain? Well, IMD predicts that rain in March will be much less in northwest (like Punjab, Haryana), while the south will get a bit more.
Less rain during march 2025 in Northwest India means less hydropower generation, isn’t it? Remember that hydropower (from dams) needs water. Less rain in the northwest, where big dams are, means less hydro power—maybe only 20-25 GW instead of the usual 30-40 GW. In 2024, hydro dropped 10% because of a weak monsoon, and 2025 could be similar.
This gap (10-15 GW), of course, has to be filled by coal power plants, which need coal to run.
Note also that summer is when industries like steel and cement work hard, and farmers use pumps for irrigation. This adds another 20-30 GW to demand, especially in hot, dry areas like central and northwest India.
So, bottomline is: From March to May 2025, India might need 270-280 GW of power at peak times (up from 260 GW in 2024), with coal plants working overtime because hydro can’t keep up and solar only works during the day.