New Delhi, Sept. 1 -- A raging dry spell in August has forced farmers to fire up irrigation pumps and homes to blast air-conditioners, driving power shortages far beyond last year's levels. Data from the Grid Controller of India Ltd showed that national power deficit shot past 10 million units on 27 August, enough to power two million homes, triggering load shedding to keep India's vast power grid stable.

The crunch is spilling into wholesale markets, where buying bids on power exchanges have spiked while dwindling coal reserves at thermal plants and reduced hydro output threaten further supply disruptions. With 55 gigawatts (GW) of thermal capacity offline due to maintenance and forced outages, grid operators are increasingly turning to...