Soaring temperatures across Asia are driving up energy demand just as the US-Israeli war against Iran squeezes supplies, increasing the risk of a severe crisis with the hottest months of the year still to come.
Record Heat and Energy Demand
In India, temperatures hit 47C across multiple states this month, driving electricity demand to a record 271 gigawatts for four straight days, a level that the grid authority had projected as the full-year ceiling for 2026-27. There are three full months of summer still to go. In Seoul, the mercury has held at around 13 per cent above the long-term average since mid-May, causing extreme heat warnings. Shanghai has averaged 12 per cent above normal and Tokyo around 10 per cent.
India's heatwave days have increased by 0.44 days per decade since 1961, compound hot-humid days rose from 14,086 between 2015 and 2019 to 16,970 between 2020 and 2024, and, according to a World Weather Attribution study, the climate crisis has tripled the likelihood of such heat occurring. A longer and more humid summer means more days of unbearable heat and more hours of air conditioning for longer stretches of the year, experts warn.
"The peak demand is not just increasing in quantum every year but the time duration is shifting," says Saloni Sachdeva Michael, lead energy specialist for India's clean energy transition at the Institute for Energy Economics and Financial Analysis. "Earlier, somewhere in June-July, we would see the peak. Then it moved to May. Now we're seeing in April itself we touched such high peaks."
Cooling Appliances Driving Demand
India's power ministry confirmed that the demand spike was linked to "the greater usage of cooling appliances." ACs are already contributing 60 to 70 gigawatts to peak demand in India alone and the pressure is only going to grow with the arrival of monsoon as humidity increases. The surge in demand is also driven by a broader shift in how India uses energy. Transport, industry and even cooking are now starting to get electrified as the country tries to reduce its dependence on fossil fuels. That shift, combined with worsening heat, means electricity demand is rising from multiple directions at once.
"Electricity as a fuel is emerging as a centre of economic growth," Sachdeva Michael says. "We've seen the transition in transport, steel, cement, cooking all shifting towards electrification. All of this coupled with the heatwaves India is facing – that's becoming a challenge."
War Impact on Energy Supplies
Meanwhile, the US-Israeli war on Iran has closed the Strait of Hormuz, through which roughly a fifth of the world's seaborne oil and a third of its liquefied natural gas passes, hitting India, one of Asia's largest energy importers, particularly hard. Gas-fired plants, which would normally bridge the gap between the afternoon peak of solar and the night-time base load of coal, are being rationed across the region as LNG supplies tighten and freight costs surge. Qatar, which until recently supplied about 40 per cent of India's LNG imports, has seen shipments fall sharply. India has scrambled to diversify, with Oman's share of its import mix climbing from around 16 per cent to about 30 per cent, and new spot cargoes locked in from the US, Australia, Nigeria, Angola, Mauritania and Indonesia, but the shortfall remains.
With gas rationed, the load is falling on coal. At India's peak demand minute on 21 May, thermal plants supplied 62.8 per cent of the actual load. Coal stocks at thermal plants stand at just over 23 days of consumption, below the 30-day buffer the government targets, and are being drawn down further as plants are pushed to run flat-out.
The energy ministry earlier directed all coal plants to defer planned maintenance through 27 May. Coal-fired plants generated around 52 per cent of Asia's utility-supplied electricity in 2025. In India, coal alone generated 75 per cent of actual electricity in 2024, nearly 1,518 of 2,030 terawatt-hours. Gas supplied under 3 per cent.
Renewables and Storage Challenges
Even as India continues to aggressively expand its clean energy infrastructure, the demand for power is increasing much faster. The share of cooling-related usage is set to become a sizeable share of India's electricity consumption. India adds 10 to 15 million new air conditioners annually, with another 130 to 150 million expected over the next decade. The country's heatwave days are increasing by the decade and, worse still, average night-time temperatures are rising too. A 2024 study showed that the climate crisis was adding 50-80 nights each year where temperatures exceeded 25C, impacting sleep and putting people's health at risk and increasing the demand for ACs.
Across Asia, the share of dwellings with air conditioning is expected to jump from 36 per cent in 2022 to 60 per cent by 2050, according to the International Energy Agency. In India, urban AC ownership stands at about 15 per cent but is rising fast. Without policy intervention, ACs could account for over 30 per cent of projected national peak demand by 2035, according to a new study by the India Energy and Climate Center at the University of California, Berkeley. "ACs are already contributing 60 to 70 gigawatts to peak demand, and their growth is outpacing the grid's ability to keep up after sunset," says Nikit Abhyankar, the study's lead author. "Without intervention, we risk blackouts or costly emergency fixes."
Renewables have absorbed some of the shock. Solar contributed 22 per cent of India's load at the peak demand minute, according to the Centre for Research on Energy and Clean Air. Global fossil fuel power generation fell 1 per cent year-on-year in March while solar rose 15 per cent and wind 7.6 per cent. "Solar and other renewable energy sources have helped in meeting daytime peaks, and India's strong steps to ramp up solar power have been a benefit," Simon Stiell, the executive secretary of UN Climate Change, said recently.
But the problem starts after sunset. During the day, solar panels feed power directly into the grid as demand rises. In the evening, when temperatures remain high and air conditioners keep running, the solar generation disappears. Without large-scale batteries to store the solar energy, the grid falls back on coal and gas to keep the lights on. "The morning peak is much more aligned with the solar hours, so you have renewable energy capacity available," Sachdeva Michael says. "But for the evening peak, to meet the high demand, we're ending up using fossil fuel-based resources, which are obviously more carbon-intensive and higher cost. That is where the role of storage solutions becomes very, very important."
Policy Measures and Future Outlook
India's renewable energy minister Pralhad Joshi last month urged households to shift electricity use to daytime hours to reduce import dependence. India currently has around 6 gigawatts of battery storage capacity against an estimated requirement of 61 gigawatts by 2030. Storage prices are falling rapidly, following a similar trajectory as solar costs, but the gap exists between what's needed now and what is already available. "The focus now needs to shift from adding more renewable energy capacity to how we ensure that renewable energy in the system can be stored and delivered whenever we need it," Sachdeva Michael says.
The Berkeley study also found that doubling AC efficiency could reduce peak demand by 47 gigawatts by 2035 – equivalent to roughly 100 large power plants – and save consumers up to £2bn in electricity bills. India's Bureau of Energy Efficiency has a planned 2028 upgrade to AC efficiency standards, raising the minimum threshold by 25 per cent. The study calls for a longer-term roadmap making the most efficient AC currently available in India the minimum standard by 2033. "Every AC installed today locks in future electricity use," says Mr Abhyankar. "We have a narrow window to ensure they're efficient."
Without faster progress on both fronts – increasing renewable storage and efficiency – every summer of record heat risks becoming another argument for burning more coal, deepening the climate crisis that is driving the temperatures higher. "This extreme heat to lives and livelihoods is doubly challenging, coming amid the current fossil fuel cost crisis with spiralling prices for imported fossil fuels around the world due to conflict in the Middle East, and is a double reminder of the need for nations to move even faster to renewables," Mr Stiell warned this week, "for energy security, affordability and protection of population and economies."
