Delhi's Electricity Transition Faces Challenges as Demand Peaks Rise

Delhi’s electricity transition is being tested by a combination of rising day-and-night demand peaks, shrinking local generation, untapped rooftop solar potential and slow progress in smart metering, increasing the urgency for battery storage and cleaner power procurement from neighbouring states, a study by IEEFA and Ember said. The capital recorded peak demand of 8,748 megawatts (MW) on June 29, 2026, its highest June level during FY23-27. Demand had reached 8,442 MW in June 2025, reflecting growing cooling requirements amid worsening heat stress. The city now experiences two distinct peaks, including a significant night-time surge when solar generation is unavailable. “The emergence of significant night-time peaks underscores the importance of energy storage to utilise renewable energy resources in meeting evolving demand patterns,” the report said. Delhi’s total energy requirement rose to a record 38,482 million units (MU) in FY26, accounting for around 2.2% of India’s requirement. Demand is being driven by cooling, commercial activity and increasing electrification of transport and services. The challenge is compounded by falling local generation. Delhi’s own output declined to 4,627 MU in FY25, meeting only 13% of total power purchases of 36,813 MU. In FY19, local generation had contributed 7,424 MU, or 20% of purchases. The widening gap is being met through long-term power purchase agreements with generating stations outside Delhi and short-term market purchases. Gas-based generation has declined because of limited availability of cheaper domestic gas and volatile import prices, while renewable additions have not fully offset the fall. The study said Delhi’s land and resource constraints require a transition strategy different from renewable-rich states. “Delhi’s transition will depend on optimising clean power procurement, scaling rooftop solar and storage, improving energy efficiency, enabling demand-side flexibility, and leveraging power markets,” it said. Rooftop solar capacity reached around 446 MW by June 2026, against the 750 MW target under the Delhi Solar Energy Policy 2023. Although capacity has grown from 119 MW in March 2019 and FY26 saw a record 5,378 new installations, substantial potential remains untapped. The report recommended faster project approvals, wider use of group and virtual net metering, rooftop solar-plus-storage incentives and renewable energy with storage in future power purchase agreements. It also called for solar-hour-aligned time-of-day tariffs to encourage consumers to shift flexible loads, including electric vehicle charging, to periods of higher renewable generation. However, Delhi had only 3,521 smart meters sanctioned under the Revamped Distribution Sector Scheme as of July 2026, with installation yet to progress. Delhi currently has a 10 MW/10 MWh battery system operated by TPDDL and a 20 MW/40 MWh system operated by BRPL. The study said storage capacity must be expanded to manage night-time peaks and improve access to clean electricity during non-solar hours.