India Explores Gas-Fired Power to Balance Peak Demand

India is weighing the use of gas-fired power plants to handle peak electricity demand, despite the higher costs compared to coal and renewables. Gas now makes up only 1.5% of the country’s power mix, down from 3% in 2020, while coal still accounts for about 75%. At the same time, India is pushing to scale up renewable energy as part of its clean transition.

Ghanshyam Prasad, Chairman of the Central Electricity Authority, said the government has prepared a 100-day plan that allows gas plants to step in when required, with mechanisms to cover startup costs and price fluctuations. The effective grid-connected gas capacity is now around 20 GW, of which 13–14 GW was deployed last year during high demand.

Although favorable weather and slower demand growth reduced the need for gas this year, the government sees these plants as a flexible, lower-carbon alternative to coal. Their strategic use is intended to strengthen energy security while supporting India’s broader sustainability goals.