India’s electricity consumption touched a record ~149 billion units (BUs) in March 2026, but growth slowed sharply to 1.7% year-on-year, as unseasonal rains and weaker industrial momentum tempered demand, according to a crisil intelligence report.
“Power demand in March rose to ~149 billion units… however, the growth rate was a modest 1.7% on-year,” the report said, flagging a divergence between rising consumption levels and slowing growth momentum.
Despite the moderation, demand remains structurally strong, with Crisil estimating 5.5–6.5% growth in FY27, driven by rising temperatures and lower rainfall if El Niño conditions materialise, which could push cooling demand higher.
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Weather and Industrial Cooling Drive
March consumption was the highest for the month since at least 2010, reflecting the steady expansion in India’s electricity demand base even as near-term drivers softened.
The moderation was largely weather-led. “The 10% above-normal rainfall during March 1-25… reduced cooling demand,” Crisil noted, highlighting the direct impact of climatic conditions on electricity usage.
A high base effect also weighed on growth, as March last year had seen a sharp 6% increase, making incremental gains harder this year.
Industrial demand showed signs of cooling, with the Manufacturing PMI declining to 53.9 in March from 56.9 in February, indicating slower expansion in factory activity—a key driver of power consumption.
Reflecting softer demand, peak power demand fell to 238 GW, about 3% lower than the 245 GW recorded in January, the highest this fiscal.
Market Dynamics
Electricity market dynamics also shifted, with prices easing amid ample supply. The real-time market (RTM) volume rose 41.7% year-on-year to 5,283 million units, while the average market clearing price declined 10% to ₹3.71 per unit.
“During solar hours… the price was ₹1.7 per unit vs ₹2.5… and during non-solar hours… ₹4.2 vs ₹4.6,” the report said, indicating broad-based price softening.
Similarly, the day-ahead market saw prices fall around 6% to ₹4.1 per unit, enabling discoms and large consumers to procure cheaper power.
On the supply side, generation rose ~1.8% on-year to 163 BUs, broadly in line with demand trends.
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Renewables continued to expand, backed by 50.9 GW capacity addition in FY26, while coal remained dominant, accounting for ~73% of total generation, underlining its role in balancing variability.
Coal stocks remained stable at 59 million tonnes, sufficient for 19 days of consumption, indicating no immediate supply-side stress.
For FY26, overall power demand growth stood at a muted 0.9%, reflecting the combined impact of weather and economic activity.
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