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India's Power Demand Rebounds 6.8% in December, Offsetting Weak Q3

India's power demand showed a strong recovery in December 2025, rising 6.8% year-on-year, which helped cushion a marginal 0.4% decline for the entire third quarter of FY26. The quarterly weakness was attributed to unseasonal rains and lower average temperatures. Despite this, peak power demand demonstrated underlying strength, growing 7.6% to approximately 241 gigawatts. The report notes improved coal availability and a strong pipeline for renewable energy tendering, even as thermal plant load factors remained subdued.

Key Points: India's December Power Demand Rises 6.8%, Q3 Trends Soft

  • December demand up 6.8% YoY
  • Q3 demand down 0.4% due to weather
  • Peak demand strong at 241 GW
  • Thermal power dominates generation mix
  • Coal stocks improve 18% YoY
2 min read

December power demand rises 6.8%, offsetting softer Q3FY26 trends: Nuvama

India's power demand rose 6.8% YoY in Dec 2025, offsetting a marginal Q3 decline. Peak demand grew 7.6%, while thermal PLFs remained muted.

"We forecast modest PAT growth across Nuvama Power coverage in Q3FY26, led by weak thermal PLFs. - Nuvama Research Report"

New Delhi, January 14

India's power sector witnessed a recovery in demand in December 2025, which helped cushion the overall weakness seen during the third quarter of FY26, even as unseasonal rains and lower temperatures weighed on demand for most of the quarter, according to a report by Nuvama Research.

The report said power demand rose 6.8 per cent year-on-year in December 2025, marking a steady revival after a weak start to the quarter. It also expects modest profit growth across its power sector coverage universe in Q3FY26.

The report stated, "We forecast modest PAT (Profit After Tax) growth across Nuvama Power coverage in Q3FY26, led by weak thermal PLFs (Plant Load Factor).

However, the report also mentioned that for the full Q3FY26 period, demand declined marginally by 0.4 per cent year-on-year, mainly due to unseasonal rains in October and lower average temperatures of 23 degrees Celsius compared to 25.7 degrees Celsius in Q3FY25.

Peak power demand remained strong despite the muted quarterly performance. Peak demand increased to around 241 gigawatts in Q3FY26, up 7.6 per cent from the year-ago period, indicating underlying strength in electricity consumption during high-demand periods.

On the generation side, thermal power continued to dominate the mix, accounting for nearly 77 per cent of total generation during Q3FY26. However, plant load factors (PLFs) across utilities remained muted.

The report also noted that power exchanges saw mixed trends. Electricity volumes on the Indian Energy Exchange (IEX) grew only modestly, with volumes rising 3 per cent year-on-year in December 2025 and 12 per cent in Q3FY26.

Overall volumes, including renewable energy certificates, declined due to weak REC demand. Power prices during solar hours increased, while non-solar hours witnessed stronger demand and widening peak deficits.

Coal availability improved during the quarter, with coal stocks at NTPC plants at around 18 days and overall inventory piling up to about 54 million tonnes, up 18 per cent year-on-year.

Looking ahead, Nuvama expects modest profit growth across its power sector coverage universe in Q3FY26. Renewable energy tendering remains strong, with a pipeline of around 350 GW, largely driven by solar and storage projects.

- ANI

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Reader Comments

P
Priya S
The improvement in coal stocks to 54 million tonnes is a relief. Last year's shortages were a nightmare for power generation. Hopefully, this means fewer power cuts this summer, especially with peak demand hitting 241 GW. Fingers crossed! 🤞
R
Rohit P
Modest profit growth for power companies? With thermal PLFs being weak, it makes sense. But the real story is the 350 GW renewable pipeline. That's where the future is. Solar and storage projects need to get online faster to reduce our fossil fuel dependency.
S
Sarah B
Interesting analysis. The marginal 0.4% decline for the full quarter due to unseasonal weather shows how sensitive demand is to climate. With changing weather patterns, the power sector needs to build more resilience. The peak demand strength is encouraging though.
V
Vikram M
As a small business owner, consistent power supply is crucial. The report mentions mixed trends on power exchanges and weak REC demand. The government should simplify the process for buying renewable energy directly. It's still too complicated for the average commercial user.
K
Kavya N
The data on power prices increasing during solar hours is counter-intuitive. Shouldn't solar power bring prices down? This indicates our grid management and storage capacity need serious upgrades. We have ambitious targets, but execution on the ground seems slow. Just my two paise.

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