India’s electricity demand grew 9% year-on-year in the first 22 days of June, extending the strong momentum seen in May, but the rebound comes amid a sharp 9.3% decline in domestic coal production and thermal power plants holding coal stocks well below prescribed levels, raising concerns over fuel adequacy if summer demand intensifies further.
Data from Grid Controller of India Ltd (GCIL) showed power demand growth accelerated after an 11.2% year-on-year increase in May, taking growth during the first two months of FY27 to 7.1%. The recovery follows weather-related disruptions earlier in the summer and reflects sustained consumption from industrial, commercial and residential users.
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“India’s electricity demand registered a YoY growth of 9.0% during the first 22 days of June 2026 after an 11.2% YoY growth in May, reflecting a healthy recovery in the summer season despite continued weather disruptions,” said Ankit Jain, Vice President and Co-Group Head, Corporate Ratings, Icra.
Fuel Constraints
The rebound in demand is taking place at a time when coal inventories at thermal power plants stood at only 15 days as of June 15, substantially below the normative stock level of 24 days. Although inventories remain materially higher than the critically low levels seen in September 2023, the cushion has not improved despite the summer demand pickup.
Domestic coal production declined 9.3% year-on-year during the first two months of FY27, largely because of lower output from Coal India Ltd. Coal supplies to the power sector fell by 1.1%, indicating tighter fuel availability even as electricity consumption strengthened.
“Sustained recovery in production and supply remains critical to maintain adequate buffer stocks. Further decline from the current level could lead to an inability to meet any significant surge in peak demand,” Jain said.
Supply Response
Icra expects power demand growth to remain robust in FY27, supported by expectations of a stronger summer season, the potential impact of a Super El Niño, a favourable base effect and continued momentum in industrial and commercial activity.
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The demand growth is being accompanied by a strong capacity addition cycle. India added 9.6 GW of generation capacity during the first two months of FY27, primarily from renewable energy projects. The rating agency expects net capacity additions of around 50 GW in FY27, driven by a strong renewable energy pipeline built through sustained tendering activity and the phased expiry of interstate transmission charge waivers.
Meanwhile, spot power tariffs on the Indian Energy Exchange averaged ₹4.6 per unit as of June 15, lower than ₹4.9 per unit in May, but significantly higher than ₹3.7 per unit recorded in June 2025, indicating that short-term power prices remain elevated despite pressure during solar generation hours.
TOPICSPowerpower discomsThis article was first uploaded on June twenty-four, twenty twenty-six, at thirty-seven minutes past seven in the evening. © The Indian Express (P) Ltd