Peak demand has stayed below 230 GW from July, and lower yearon-year in three of the six months to December. In December last year, peak demand stood at 224 GW. Power demand was weak in several months of the current fiscal year, even during the peak summer month of May, as favourable weather conditions and a prolonged monsoon tempered electricity usage.
The trend has reversed in December, with power consumption rising about 5% year-on-year to 110.8 billion units in the first 25 days of the month, snapping declines seen over the previous two months.
“While demand growth has remained muted in FY26 due to the prolonged monsoon and a high base effect, a seasonal recovery during winter is evident,” said Ankit Jain, vice president and co-group head, corporate sector ratings, ICRA Ltd. “However, full-year growth is still expected to remain modest at around 1.5% to 2%.”
Spot Prices Remain Stable
Total electricity consumption declined in May, June, October and November. Consumption in November fell about 0.8% from a year earlier to 123.4 billion units, while October recorded a sharper 6% decline to 132 billion units. September, in contrast, saw a 3.2% increase to 145.9 billion units.
According to the India Meteorological Department, an early monsoon reduced demand in May, while weatherrelated disruptions—including storms in the eastern region and rainfall across southern states as well as Maharashtra and Gujarat—weighed on consumption in November. The IMD has projected that minimum temperatures from December through February are likely to be normal to below normal across much of central India, adjoining peninsular regions and northwest India, supporting seasonal electricity demand.Spot power prices on the Indian Energy Exchange remained stable, with day-ahead market tariffs averaging `3.9 per unit so far in December, around 1% higher than a year earlier.
Capacity addition accelerates
India added 29.8 GW of net power generation capacity between April and October, more than double the increase recorded in the same period last year. This was driven by renewable energy projects commissioned ahead of the expiry of a transmission charge waiver, according to ICRA.
Full-year capacity additions are projected at 45–50 GW, much higher than in FY25. Coal stock at power plants improved to 54.7 million tonnes as of December 25, up from 53.7 million tonnes at the end of November, marking availability of thermal power plants to supply power.
