India Power Demand Growth Slows to 1.7% In March Amid High Rainfall

India’s power consumption growth moderated in March, reflecting the impact of unseasonal weather conditions and a high base from the previous year.  

Despite the slowdown, overall demand remained at a record level for the month, indicating underlying resilience in electricity usage. 

Moderate Growth Driven by Weather Impact 

Power demand increased to 149 billion units (BU) in March, compared to 147 BU in the same period last year, marking a growth of 1.7%.  

This also represents the highest electricity consumption recorded for March since 2010. 

The relatively subdued growth was largely attributed to above-normal rainfall during the first three weeks of the month, which reduced the need for cooling.  

Additionally, the high base effect, following a stronger growth phase last year, further moderated the expansion. 

Generation And Renewable Contribution Increase 

Electricity generation is estimated to have grown slightly higher at around 1.8% year-on-year, reaching approximately 163 BU during the month. Growth was broad-based across fuel sources, except for gas-based generation. 

Renewable energy continued to show strong momentum, supported by capacity additions. India added around 50.9 GW of renewable energy capacity in FY26, contributing to the sustained increase in clean power generation. 

Market Dynamics and Price Trends 

The moderation in demand also influenced short-term power market dynamics. Activity in the real-time electricity market (RTM) saw a sharp increase in volumes, rising over 40% year-on-year to 5,283 million units. 

However, the average clearing price in the RTM declined by around 10% to ₹3.71 per unit, indicating sufficient power availability.  

Lower prices enabled distribution companies and industrial consumers to optimise procurement costs by increasing reliance on exchange-based purchases. 

Outlook For FY27 

Looking ahead, power demand is expected to regain momentum, with growth projected in the range of 5.5% to 6.5% in FY27, taking total consumption to around 1,815-1,825 BU. 

The anticipated onset of El Niño conditions from mid-2026 could lead to higher temperatures and lower rainfall, increasing cooling requirements.  

Combined with steady economic activity and a lower base, these factors are expected to support stronger demand growth. 

Read More: India Assures Stable Petrol, Diesel and LPG Supply Amid Global Concerns! 

Conclusion 

While March witnessed a temporary slowdown due to weather and base effects, the outlook for power demand remains positive, supported by structural growth drivers and evolving energy consumption patterns. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.