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India's Power Demand to Surge 6% Amid El Nino Heatwave, Says Crisil

Power demand in India is projected to grow 5.5-6.5% in the current financial year, reaching up to 1,825 billion units, primarily due to anticipated El Nino conditions increasing temperatures and cooling needs. This follows a record high for power consumption in March, the highest for that month since at least 2010, with real-time market volumes surging over 41%. On the supply side, coal remains the dominant fuel, accounting for 73% of generation in March, while renewable energy capacity continues to expand with significant additions. The report links steady economic growth and a low base effect as additional factors supporting the rise in electricity consumption across the country.

Key Points: Power Demand to Rise 6% This Fiscal Year Due to El Nino

  • El Nino to drive cooling demand
  • Demand to hit 1,820 BUs in FY27
  • March power use highest since 2010
  • Coal remains dominant at 73% share
  • Renewable capacity grows with 50.9 GW added
2 min read

Power demand to rise up to 6% in this financial year amid expected El Nino-led heat: Crisil

Crisil report forecasts 5.5-6.5% growth in India's power demand for FY27, driven by El Nino heat, economic growth, and increased cooling needs.

"Power demand is estimated to rise 5.5-6.5 per cent year-on-year in fiscal 2027 to 1,815-1,825 BUs - Crisil Intelligence Report"

New Delhi, April 10

Power demand in the country is expected to rise by around 6 per cent in the current financial year, driven by the anticipated impact of El Nino conditions, which are likely to increase temperatures and reduce rainfall, according to a report by Crisil Intelligence.

The report stated that power demand is estimated to grow 5.5-6.5 per cent year-on-year in fiscal 2027 to reach 1,815-1,825 billion units (BUs). The expected emergence of El Nino in July is likely to push up cooling demand due to higher temperatures and lower rainfall. In addition, steady economic growth and a low base are expected to support the rise in power consumption.

It stated, "Power demand is estimated to rise 5.5-6.5 per cent year-on-year in fiscal 2027 to 1,815-1,825 BUs, because of the expected emergence of El Nino in July".

The report also highlighted recent trends, noting that power demand in March rose to approximately 149 billion units, surpassing the 147 BUs recorded in the same month last year. This marks the highest March consumption since at least 2010.

Activity in the short-term power market reflected this trend. The real-time electricity market (RTM) volume in March surged 41.7 per cent year-on-year to 5,283 million units (MUs), up from 3,727 MUs a year ago.

Despite this, the average market clearing price (MCP) in the RTM declined 10 per cent year-on-year to Rs 3.71 per unit, indicating ample power availability in the system.

On the supply side, power generation is estimated to have increased by a moderate 1.8 per cent year-on-year to 163 BUs in March. Except for gas, all major fuel sources recorded an increase in generation.

Renewable energy generation continued its upward trend, supported by capacity additions. The country added 50.9 GW of renewable energy capacity, including small hydro, in fiscal 2026. Coal-based generation saw a marginal increase of around 0.4 per cent year-on-year, with its share in total generation rising to around 73 per cent in March, compared to the fiscal 2026 average of around 68 per cent.

The report noted that coal remains the primary fuel for power generation in the country due to its flexibility in ramping output based on demand. Hydro and nuclear power generation also recorded growth of around 13.8 per cent and 8.3 per cent year-on-year, respectively, during the month.

Rising temperatures and weather-related factors, along with economic growth, are expected to drive higher electricity demand in the current financial year.

- ANI

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Reader Comments

S
Sarah B
Living in Gurgaon, the AC is already running 24/7. A 6% rise in demand sounds conservative. The grid needs to be ready for peak loads in May-June. Hopefully, the ample power availability they mention holds true.
V
Vikram M
The focus should be on energy efficiency. So much power is wasted in commercial buildings and old appliances. Government schemes for efficient ACs and fans can help flatten this demand curve.
P
Priya S
Respectfully, while the report is informative, it glosses over the regional disparities. My family in a Tier-2 city still faces 2-3 hour cuts daily in summer. "Ample power availability" is not the ground reality for many. The planning needs to be more equitable.
R
Rohit P
Good to see hydro and nuclear generation growing! 👍 We need a balanced mix. Can't rely only on solar/wind when the sun sets or wind stops. Coal is necessary for now as a base load, but glad RE capacity is being added.
K
Karthik V
The real-time market volume surge of 41.7% is huge! Shows how dynamic and complex power management has become. Kudos to the grid operators if they're managing this with lower prices. Complex hai, but seems under control.

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