After a sluggish power demand and generation in May-July, the power sector saw signs of growth in August. According to a JM Financial report, the power demand grew by 4 per cent YoY, and power generation also saw a higher output across hydro and renewable segments.
JM Financial says that several factors contributed to the revival of power generation and demand in August. These include higher rainfall, a low base, and capacity addition.
Here is a look at the important components of the power sector of India in August 2025
Power generation growth
The total conventional power generation, including coal, gas, nuclear and hydro, stood at 134 billion units in August. The hydro generation during August was 24 billion units. While the total conventional power output grew by just 1 per cent YoY in August, the hydro power generation saw a 9 per cent YoY increase. This is due to a higher and earlier rainfall in the preceding months.
Renewables grew 10 per cent YoY in August and saw a total output of 25 billion units. Power through solar and wind generation grew by 9 per cent YoY and 25 per cent YoY, respectively.
Power demand
JM Financial report shows that the energy demand in August stood at 150 billion units, increasing 4 per cent YoY. In July and May, the power demand saw about a 2 per cent YoY decline.
The one primary reason for apparent demand growth is the low base in August 2024, when the peak energy demand was down 6 per cent YoY. As per JM Financial’s estimates, the YTD energy demand in FY26 stand at 750 billion units, almost the same as the last year.
Capacity addition
In August, the total wind capacity addition in India stood at 541 MW, much higher than. 117 MW in August 2024. Furthermore, solar energy sources added a capacity of 4,114 MW in August this year, whereas in the corresponding month last year, the addition was 2,224 MW.
The total hydro capacity addition in YTD in FY26 was 2,380 MW.
Power tariffs
JM Financial states that the average Market Clearing Price (MCP) on the India Energy Exchange stood at Rs 4 per kWh in August. Last year, in the same month, the average MCP was Rs 4.3 per kWh, indicating subdued demand.
Additionally, the total coal production in August increased by 12 per cent YoY to 70MT. The prices of most raw materials, such as TopCon modules, remained stable during the month. However, the price of polysilicon increased to Rs 6.8 per KG in August from Rs 5.6 per KG in June.