India’s power demand is poised for a sharp rebound from mid-May, with brokerages flagging a sustained summer surge driven by rising temperatures and potential El Niño conditions, even as recent weather disruptions led to a temporary drop in consumption and prices, according to brokerage reports.
A report by JM Financial said demand had already scaled record levels before being hit by an abrupt weather shift. Peak demand touched 238 GW during solar hours and 224.6 GW during non-solar hours on March 10, before falling sharply due to unseasonal rains and lower temperatures across north India .
“A sudden weather disturbance… dampened solar/non-solar hours peak demand by 40/20 GW within a period of 10 days,” the report said, pointing to a rare 1,000-km cloud cover that led to a sharp temperature drop of up to 20°C in some regions.
Record Price Crash
The impact was visible in both demand and market prices. Peak load dropped to around 200–220 GW, while electricity prices on the Indian Energy Exchange (IEX) fell to ₹0.0002 per unit, the lowest since the market’s launch.
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However, the brokerage expects this dip to reverse quickly. “We believe demand is likely to pick up beginning mid-May and possibly sustain up to Sep’26E– as seen during the 2023 El Niño,” JM Financial said , adding that El Niño years have historically driven demand growth of 4–9%, with peak demand reaching 240 GW in 2023.
Supporting this outlook, a report by Nuvama Research pointed to a weak base, with India’s power demand growing just 0.8% in FY26, while March demand rose 0.7% year-on-year to 150 billion units, impacted by extended monsoon conditions and delayed summer onset .
Despite the muted growth, peak demand in Q4FY26 touched ~245 GW, indicating underlying strength. However, thermal plant load factors remained at ~69.8% in March, suggesting available capacity that could be ramped up as demand rises.
The reports also highlight structural imbalances in the power market. According to Nuvama, solar-hour supply exceeded demand, pushing prices down to ₹3.3 per unit, while tighter supply during non-solar hours drove prices up to ₹5.3 per unit .
Shift to Coal
Weather patterns are expected to play a critical role in shaping demand. The India Meteorological Department has indicated a transition to ENSO-neutral conditions followed by a possible El Niño during the monsoon, with rainfall projected at 90–95% of the long period average.
On the supply side, constraints are beginning to emerge. JM Financial warned of a potential shortfall in hydro generation due to lower winter rainfall and snow cover. “There is a high probability of a shortfall in hydro generation this summer,” it said , adding that this could lead to increased reliance on coal-fired generation.
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Coal is expected to remain the backbone of supply response, even as renewable energy capacity additions continue at pace. Nuvama noted that about 43 GW of renewable capacity has been added in FY26, largely led by solar, but variability in generation continues to create evening supply gaps.
The expected demand surge is also likely to benefit merchant power producers, particularly during peak evening hours when prices tend to rise due to tighter supply.
At the same time, risks to demand remain. JM Financial cautioned that industrial consumption — which accounts for about 34% of total electricity demand — could be affected by broader economic conditions .
With temperatures rising and demand expected to accelerate, the coming months are likely to test the resilience of India’s power system, with fuel availability, hydro output and grid balancing emerging as key variables in meeting peak load requirements.
TOPICSPowerpower discomsThis article was first uploaded on April fifteen, twenty twenty-six, at ten minutes past eight in the night.