India’s electricity demand growth is expected to rebound to around 5 per cent in the current financial year (FY27), supported by expectations of peak summer, a potential super El Nino impact, a lower base and the continued momentum in industrial and commercial activities.
In a report, Icra said that demand rebounded in FY27, increasing by 7.1 per cent year-on-year (YoY) in the first two months, as per data from the Grid Controller of India or GCIL. The improvement was driven by a rise in temperatures across several regions with the onset of the summer season. The demand, however, remains exposed to weather-related uncertainties and any deviation from the anticipated climatic conditions could impact the growth outlook.
Icra pointed out that spot power tariffs on the Indian Energy Exchange (IEX) averaged at Rs 4.6 per unit as on 15 June 2026, lower than Rs 4.9 per unit in May 2026. However, the prices in June 2026 were much higher than Rs 3.7 per unit recorded in June 2025.
“While the spot tariffs are likely to remain moderate amid increased supply, especially during the solar hours, the trajectory for FY27 will depend on the balance between supply additions and demand growth over the year,” the report emphasised.
The coal stock stood at around 15 days as of 15 June 2026, largely unchanged from the levels seen in May 2026. A further decline from the current level could result in an inability to meet any significant surge in peak demand, Icra warned. While stocks remain below the normative level of 24 days, they are materially higher than that of September 2023, providing comfort for meeting the peak summer demand, as per the report. |
