New Delhi, June 13 -- India's power grid could face a fresh challenge this year as fears of an El Niño-induced weak monsoon threaten hydropower generation just when electricity demand is surging to record highs. Reservoir levels are already lower than a year ago, and experts warn hydro output could fall by about 10% in FY27.

Hydropower contributes only about a tenth of India's electricity, but it plays an outsized role because it can be switched on quickly to balance the grid when solar power fades, and thermal plants need time to ramp up. That flexibility makes it a critical backup source.

Water storage at key projects such as Koyna and Tehri has dropped sharply, raising concerns over lower turbine efficiency and reduced output. R...