By Simarpreet Singh, Executive Director & CEO, Hartek Power
Globally, energy security is transforming into an electricity issue due to the intensifying electrification of countries and the evolving elements of energy demand. Propelled by the burgeoning shift from fuel-based to electricity-led consumption by transport, industry and digital networks, the energy narrative is no longer restricted to securing steady supplies. Instead, it is about promoting a reliable, robust and round-the-clock electricity ecosystem.
The ongoing energy transition
In January 2026, installed power capacity in India crossed 520 GW. The power industry is going through a structural transition, as it moves its energy emphasis from fuel security to electricity security. While the former focused on imports of oil, coal and gas, the latter concerns the generation, storage and distribution of power reliably.
In late 2025, the nation achieved a momentous milestone when more than half of its installed electricity capacity was derived from non-fossil fuel sources. This was remarkable since it came five years ahead of the 2030 deadline. However, more than mere generation capacity, the challenge now concerns ensuring a sturdy grid providing power 24/7.
Understanding the demand drivers
This crucial shift has been spurred by diverse drivers, including industrial demand and rapid electrification. Herein, the rising demand for clean electricity comes from an ongoing transition towards electric vehicles, industrial processes and sunrise sectors such as green hydrogen. The advent of artificial intelligence and digital infrastructure like data centres is further fuelling this demand, imposing a substantial load on the power grid. At a deeper level, these trends underscores a fundamental reality- the power sector is the backbone of every industry and economic activity. From manufacturing floors and mobility networks to digital ecosystems and emerging technologies, reliable electricity is the foundational enabler. As industries evolve and scale, their dependence on a resilient, round-the-clock power supply only intensifies, making the strength of the power sector synonymous with the strength of the economy itself.
Decarbonisation measures supported by a strong policy push, like the National Green Hydrogen Mission and rooftop solar via the PM Surya Ghar Muft Bijli Yojana, are also driving the renewables shift. All of this is backed by increasing economic growth, pushing faster expansion in the country’s energy demand, outpacing that of other major economies. As per an International Energy Agency’s 2026 report, electricity demand in India is slated to record an average annual growth rate of 6.4 per cent till 2030, one of the fastest rates worldwide.
Besides electric vehicles and green hydrogen, increasing demand for electricity is emerging from the swift expansion of data centres. Consequently, domestic electricity demand from data centres is anticipated to jump nearly fivefold from 13 TWh to 57 TWh between 2024 and 2030. This will boost the share of national electricity demand of data centres from approximately 0.8 per cent to 2.6 per cent.
Smart meters and some challenges
In the present landscape, demand-side management (DSM) must be augmented to ensure a flexible, smarter power system. Efficient DSM is vital to balance the nation’s increasingly renewable-heavy power ecosystem, which can lower the need for expensive peak-time capacity addition. Smart meters will be useful in promoting ToD (time-of-day) tariffs, incentivising consumers to move their usage to the solar-rich daytime period. Further, large industrial and commercial consumers, such as data centres, IT parks and manufacturing zones, can be integrated into organised DSM programmes, providing flexible loads in tune with renewable generation patterns. These steps can boost grid stability by shifting peak loads to off-peak periods, lowering system costs and curbing renewable curtailment.
Despite this progress, there are some current challenges. One of the primary issues is grid pressure. Rising demand for power, particularly during peak periods, has put great stress on the grids. Although the nation successfully met its peak demand of 242.49 GW in financial year 2025-26, the need for reliable 24/7 power is growing.
The intermittency of renewable energy poses another challenge. As variable renewables like wind and solar grow, it will become more difficult to maintain grid stability. The other big challenge comes from thermal dependence. Despite rising renewables, coal is still crucial due to its reliability and role in peak balancing. As a result, coal demand is only expected to plateau and not decline swiftly before 2035.
Steps towards energy security
Given this scenario, a series of steps must be taken to address these challenges so India can move from power adequacy to total energy security. Grid flexibility alongside strong storage solutions and stronger interconnections is the need of the hour. Storage solutions should include battery storage and pumped hydro. Structural reforms are also essential. The Draft National Electricity Policy 2026 has stressed regional grid stability and resource adequacy to facilitate a financially stable, future-ready power industry.
Moreover, faster rollout of smart meters is crucial to promote ToD tariffs together with demand-side management. Although 203.3 million smart meters were sanctioned earlier, barely 53 million have been installed till January 2026, highlighting the importance of accelerating the rollout.
Addressing storage and other imbalances
Meanwhile, renewable goals cannot be achieved without boosting storage options. The deployment of energy storage via battery and pumped hydropower storage should be sped up to manage rising RE capacity and avoid curtailment. By 2031-32, the National Electricity Plan expects an energy storage capacity need of 73.9 GW. Of this, 411.4 GWh storage is required to integrate planned RE capacities.
Today, the energy security risk is not only from fuel supply disruptions. Instead, it arises from outages, grid congestion and the failure to evacuate RE power. Therefore, energy security now means managing real-time, complex demand-supply imbalances via intelligent grid management together with advanced energy storage systems.
India’s energy security stands at an inflection point, whereby a transformed energy ecosystem can support economic growth. Through vibrant domestic production of renewables, smart grid technologies and ample storage, the country can be transformed into an energy-secure nation.
