Image used for representational purpose
MUMBAI: Power demand rose to around 149 billion units (BUs) in March, surpassing 147 BUs recorded in the same month last year — the highest for March in at least a decade. However, the growth rate slowed to a modest 1.7% year-on-year, largely due to weather-related factors and a high base effect.The report attributes the subdued growth primarily to about 10% above-normal rainfall between March 1 and 25, which reduced cooling demand across regions. Typically, rising temperatures in March trigger higher electricity consumption due to air-conditioning and refrigeration loads, especially in urban centres such as Mumbai. This year, unseasonal showers dampened that surge.Industrial activity also showed some moderation, adding to the slowdown.
The Manufacturing Purchasing Managers’ Index (PMI) declined to 53.9 in March from 56.9 in February. Industrial and commercial consumers account for nearly half of India’s total electricity demand, making this segment a key driver of consumption trends.Peak power demand during the month stood at 238 GW, about 3% lower than the 245 GW recorded in January — the highest for the fiscal. Notably, March saw the lowest peak demand in the fourth quarter of FY26, reflecting the impact of milder weather conditions.
Despite the softer demand growth, supply remained ample, resulting in a decline in power prices in the spot market. The real-time market (RTM) witnessed a sharp 41.7% increase in traded volumes to 5,283 million units (MUs), indicating active participation by distribution companies and large consumers seeking cost efficiencies.At the same time, the average market clearing price (MCP) in the RTM fell 10% year-on-year to Rs 3.71 per unit.
Prices during solar hours dropped significantly to Rs 1.7 per unit compared to Rs 2.5 last year, while non-solar hours saw a decline to Rs 4.2 per unit from Rs 4.6. The day-ahead market (DAM) also recorded a nearly 6% fall in prices to Rs 4.1 per unit. The lower prices provided an opportunity for discoms and commercial and industrial users to replace costlier power with cheaper exchange-based procurement, improving overall efficiency in power sourcing.On the supply side, power generation rose by about 1.8% year-on-year to 163 BUs in March. Renewable energy (RE) generation continued its upward trajectory, supported by significant capacity additions. India added 50.9 GW of renewable capacity in FY26, including small hydro, reinforcing the structural shift towards cleaner energy sources.Coal-based generation, however, remained dominant, accounting for around 73% of total generation in March, higher than the fiscal average of 68%.
Its flexibility in ramping output up or down continues to make it the backbone of India’s power system. Hydro and nuclear generation also posted healthy growth of 13.8% and 8.3%, respectively. Coal inventory levels remained stable, with thermal power plants holding 59 million tonnes of stock at the end of March — sufficient for about 19 days of consumption, similar to February levels.Looking ahead, the report expects power demand growth to pick up in FY27, driven by weather patterns and economic activity.
Demand is projected to grow 5.5-6.5% to around 1,815-1,825 BUs. The anticipated emergence of El Niño conditions from July could lead to higher temperatures and lower rainfall, boosting cooling demand significantly.For cities like Mumbai, where electricity demand is closely tied to climate and commercial activity, the interplay between weather patterns and consumption trends is likely to remain a key factor influencing both demand and pricing in the coming months.
