India may increasingly rely on coal-fired power generation during the peak summer months to meet rising electricity demand, as escalating Middle East conflicts further tighten liquefied natural gas (LNG) supply, Reuters reported.

The Indian government traditionally encourages power plants to ramp up generation during the summer peak (April-June), including costly gas-fired units, to meet surging demand. Subsidies are also provided to relevant companies to mitigate consumer costs.

However, government tenders for 12 GWh of gas-fired power for this summer have so far received no bids, with the submission deadline approaching.

In response, the Ministry of Power is considering postponing or canceling planned summer maintenance of coal-fired plants and advising generators to avoid shutdowns during peak months.

India's leading power producer, NTPC Ltd., has already informed the national grid regulator that it will not be able to supply gas-fired power between April and June.

The country has activated emergency plans and declared force majeure, prioritizing LNG supply for household consumption and key industries such as fertilizer plants.

Petronet LNG, India's largest LNG importer, also announced force majeure for its customers due to supply disruptions from Qatar and Abu Dhabi National Oil Company.

Although India has approximately 20 GW of gas-fired power capacity, high LNG prices typically limit utilization to 6-10%, rising to around 30% in summer months.

India is unlikely to face severe power shortages even if peak demand reaches 250-260 GW, supported by sufficient installed capacity in coal, lignite, nuclear, hydropower, and wind, said Gautam Shahi, senior director at Crisil Ratings.

Nearly 75% of India's power supply depends on coal-fired generation. "India's thermal coal market is seeing steady import demand, particularly for coal grades used by power producers", said Vasudev Pamnani, director at Gujarat-based coal trader i-Energy Resources.