India’s power demand is projected to increase by up to 7% year-on-year in FY27, reaching around 1,810-1,830 billion units. This growth is attributed to higher temperatures and reduced rainfall associated with the anticipated El Nino effect, as per a recent report by Crisil. The report highlights that electricity demand in the current fiscal year is highly sensitive to weather conditions, with soaring temperatures expected to drive up cooling needs in households, businesses, and industries.
In May, power demand surged by 11.2% year-on-year to 165 billion units, with various regions in north, northwest, west, and central India experiencing temperatures 1-4 degrees Celsius above normal. Notably, Uttar Pradesh’s Banda recorded a scorching high of 48.3 degrees Celsius on May 12. Moreover, during the April-May period, power demand saw a 7.6% year-on-year increase, a significant improvement from the 1.2% contraction witnessed in the same period of FY26.
Peak power demand in May peaked at 271 GW, marking a nearly 10% rise from the previous peak of 245 GW recorded in FY26. The report also mentions a rise in industrial activity, with the Manufacturing Purchasing Managers’ Index (PMI) climbing to 55 in May from 54.7 in April. Industrial and commercial consumers contribute approximately half of India’s total electricity demand.
Real-Time Market (RTM) volumes saw a 16% year-on-year uptick to 5,529 million units in May, while the average market clearing price surged by 21% to Rs 4.16 per unit. Similarly, the market clearing price in the Day Ahead Market (DAM) increased by 18.3% year-on-year to Rs 4.8 per unit. Additionally, power generation rose by about 12% year-on-year to 178 billion units in May.
Renewable energy generation witnessed a growth of around 20%, while coal-based generation increased by 12%, maintaining its dominance with over 68% share in total electricity generation. The report also highlights that India added 7.4 GW of renewable energy capacity, including small hydro projects, in the initial two months of the fiscal year. However, coal inventories at thermal power plants decreased to 49 million tonnes by the end of May from 60 million tonnes a year earlier, with coal stock levels dropping to 16 days from 21 days during the same period due to rising electricity demand.
