Electricity prices in the spot market declined by as much as 20% during the first quarter of the current financial year 2025-26 as widespread rains kept temperatures lower, leading to lower-than-expected electricity demand in the summer months, data from the Indian Energy Exchange showed.
The market clearing price in the Day-Ahead Market stood at Rs 4.41/unit during Q1FY26, registering a decline of 16% compared to Q1FY25. Similarly, the market clearing price in the Real-Time Market declined by 20% at Rs 3.91/unit during Q1FY26 compared to Q1FY25.
Notably, during the quarter, on May 25, heavy rains pushed RTM prices down to Rs 1.53/unit, with near-zero prices during several time blocks, as per IEX data.
In June alone, the market clearing price in the Day Ahead Market stood at Rs 3.90/unit, down 28% year-on-year. Similarly, the market clearing price in the Real Time Market touched Rs 3.73/unit during June, down 26% year-on-year.
The decline in prices can be attributed to the declining energy consumption of the country which reached 150.04 billion units in June, down 1.5% from the same period last year due to early onset of monsoons.
“Simultaneously, increased hydro, wind, and sustained supply from coal-based generation resulted in higher supply liquidity on the exchange platform, which led to a substantial drop in DAM and RTM prices during Q1FY26,” IEX said.
The reduction in prices helped Discoms and Commercial & Industrial consumers to meet their demand at a competitive price and to replace their costlier power by procuring through exchanges.
The country’s peak power demand touched 241 GW on June 9 during the summer season so far. The peak power demand stood at 250 GW in 2025.
Looking ahead to FY26, peak power demand is expected to exceed 270 GW. In response to this rising demand, the government has implemented necessary measures, including the mandatory operation of imported coal-based plants, gas-based plants, and better availability of coal. “These measures will also enhance sell liquidity on the power exchanges,” IEX has said.
The country’s coal based power plants are also ramping up coal stocks to meet the expected surge in the demand for power.
Coal stocks at the country’s thermal power plants stood at 84% of the normative level as on July 4 at 60.9 million tonnes, data from the Central Electricity Authority showed.