India's power demand rises 1.7% in March, growth subdued by rainfall

India's power demand rose modestly in March due to above-normal rainfall and a high base, while lower demand also eased short-term market prices

India’s power demand grew a modest 1.7 per cent in March to 149 billion units (BU), up from 147 BU in the same month last year. This was the highest March consumption since 2010. For 2025-26 (FY26), growth was a marginal 0.9 per cent.

 

The subdued increase was attributed to 10 per cent above-normal rainfall in the first 25 days of March, which reduced cooling requirements, and a high base effect, as the corresponding period last year had seen 6 per cent growth.

 

“Given the change in power demand, generation is estimated to have increased a moderate 1.8 per cent to 163 BU in March. Apart from gas, all major fuels saw an increase in power generation over last year,” ratings agency Crisil said in a report.

   

It added that renewable energy (RE) generation rose — a trend visible since April 2025 — driven by capacity additions. The country added 50.9 gigawatt (Gw) of RE capacity, including small hydro, in FY26.

 

Power consumption is estimated to rise in the range of 5.5 -- 6.5 per cent in 2026-27 (FY27) to 1,815-1,825 BU, driven by the expected emergence of El Niño in July, which is likely to raise temperatures and reduce rainfall, in turn pushing up cooling needs. Steady economic growth and a low base are also expected to support growth in FY27.

 

The moderate trend in March eased prices in the short-term market, with activity reflecting broader conditions.

 

“The real-time electricity market (RTM) volume in March increased 41.7 per cent to 5,283 million units (MU) from 3,727 MU a year ago. However, the average market clearing price in the RTM declined 10 per cent to Rs 3.71 per unit during the month, indicating ample availability,” Crisil said.

 

The decline in prices allowed distribution companies and commercial and industrial consumers to meet requirements at competitive rates and substitute costlier power with purchases from the exchange.