Cooling Demand Will Decide India’s Power Trajectory. Time To Own The Low-Energy Cooling Race

A new analysis from the Centre for Research on Energy and Clean Air (CREA) delivers an uncomfortable message: the super El Niño building through 2026-27 will strain energy systems worldwide, but none more than India’s. CREA projects a generation gap of nearly 18 TWh between July 2026 and June 2027, as falling winds and weak rainfall cut wind and hydro output even as warmer temperatures push up demand. Additional cooling demand alone could add up to 10 TWh within a year — roughly a quarter of Delhi’s annual electricity use.

The most likely response, CREA warns, is a surge in coal-fired generation releasing an estimated 17 million tonnes of CO2, with the severe scenario touching 24 TWh of extra coal burn. Coming off a summer that has already pushed peak demand to an all-time high of 270 GW, the report crystallises something this publication has argued for years: cooling is no longer a subplot in India’s energy story. It is the plot.

The demand curve is a cooling curve

Strip away the aggregates and India’s power trajectory increasingly follows its air conditioners. Cooling already accounts for an outsized share of evening peaks in major cities — a dynamic we examined in our piece on demand response, where an RMI estimate suggested Delhi alone could shave 250–1,350 MW of peak demand through AC-focused DR programmes. With household AC penetration still under 10 percent, against China’s journey from 1 percent to 60 percent in two decades, the room-AC boom has barely begun. The India Cooling Action Plan anticipated an eightfold rise in cooling demand over 20 years; every heatwave season since has validated that arithmetic.

Business as usual is unaffordable — literally

Consider what an unmanaged AC boom means. Financially, it lands on the weakest link: discoms buying expensive peak power to serve subsidised or low-margin residential load, while the case for costly new coal capacity — 130 GW is still in the pipeline, per CREA — gets made on the back of demand peaks that better storage and efficiency could blunt.

Then there is the resource question. Every conventional AC is a package of copper tubing, motor windings and grid wiring, and copper is precisely where global supply is tightening. Analysts now warn that mining cannot keep pace with demand from data centres, EVs and — increasingly — air conditioning, with recycling covering perhaps a third of needs by 2050. Crucially, India no longer has this market to itself. Europe, warming at twice the global average with just ~20 percent AC penetration, imported $3.76 billion of Chinese air conditioners in the first half of 2026, up 43 percent. When a Midea portable unit resells for nearly four times its price in Germany, the message is clear: the world is entering a structural cooling boom, and India will be bidding against richer buyers for the same copper, compressors and refrigerants.

The R&D imperative

That is why India’s response cannot stop at buying more five-star ACs. The country with the world’s largest unmet cooling need should be the one inventing cooling with the lowest energy and material footprint — super-efficient compressors, low-GWP refrigerants, district cooling, cool roofs and passive design that reduce the tonnage needed in the first place. ICAP named R&D as a thrust area back in 2019; what it needs now is money, missions and manufacturing linkages, PLI-style.

CREA’s bottom line is that solar and storage are India’s best hedge against El Niño. True — but the cheapest terawatt-hour remains the one never consumed. The country that cracks affordable low-energy cooling will not just protect its own grid and balance of payments; it will own the defining appliance market of a warming world. India should decide, now, that it intends to be that country.