As the Indian weatherman projects a 50 per cent chance of above-normal temperatures during April to June this year, the country’s power demand is expected to grow at 6.5-7.5 per cent year on year (y-o-y) in Q1 FY26.
However, the annual growth during April-June in FY26 is likely to be lower than the annual growth in power demand witnessed in Q1 FY25, with May 2024 registering a daytime peak power demand met of 250 gigawatts (GW), an all time high.
Crisil Intelligence estimates that power demand to rise 6.5-7.5 per cent on-year vis-a-vis 11 per cent in the previous fiscal
“With the India Meteorological Department forecasting a more than 50 per cent probability of above-normal temperatures during the summer months of April, May and June, cooling demand is expected to increase,” it added.
Sufficient supplies
Despatches of coal, the primary feedstock used to generate electricity in India, to power plants surged 6.25 per cent in March and 6 per cent on-year in FY25, improving inventories.
As on March 31, thermal power plants had 58 million tonnes (mt) of coal stock, compared with 51 mt a year ago. Coal inventory improved to 20 days as on March 31, compared with 18 days in March 2024 and 19 days in February 2025, Crisil Intelligence said.
Hotter-than-usual March
Power demand in the country surged in March as the mercury climbed and demand from industrial and commercial consumers soared.
The mean monthly temperature was 25.5°C, above the 30-year (1991-2020) normal of 24.71°C. The average high temperature was 32.7°C and the average low temperature 18.3°C, higher than the 30-year normal of 31.70°C and 17.71°C, respectively, Crisil said.
Western and east central India witnessed 1-5 heatwave days during the month. As a result, power demand rose to 6.9 per cent on year, around 50 per cent higher than the full-year average of 4.3 per cent.
In the western region, power demand grew ~10% on year as several regions in Gujarat witnessed six days of heatwave, it added.
The seasonally adjusted India PMI, a proxy to estimate the country’s industrial activity, grew from 56.3 in February to 58.1 in March, the highest in eight months. The latest reading showed a substantial improvement in the health of the manufacturing sector that was above its long-run average.
With nearly half of India’s power demand emanating from industrial and commercial consumers, expansion of relevant activities are crucial for power demand to continue growing, Crisil Intelligence emphasised.
Higher cooling requirements pushed peak power demand to 235 GW, an addition of 14 GW from the previous fiscal. The effects of this surge percolated to the short-term power market as well.
The real time market (RTM) volume surged 34 per cent on-year to 3,727 million units (MU), while the day-ahead market (DAM) improved 19 per cent Y-o-Y to 5,547 MU. In March, IEX achieved the highest-ever monthly electricity traded volume of 11,215 MU, up 29 per cent on-year.
The share of RTM in total electricity volume traded on the IEX rose to a high of 33 per cent, compared with the average of around 24 per cent recorded since its inception in June 2020 to March 2025.
Despite the surge in volume, the average market clearing price for March 2025 remained stable at ₹3.93 per unit due to an increase in power supply.
More Like This
Published on April 11, 2025
