India’s electricity consumption rose to about 133 billion units (BUs) in February, the highest level for the month since at least 2010, as above-normal temperatures across several regions pushed up cooling demand, according to a report by Crisil Intelligence.

Power demand increased around 2% year-on-year compared with 131 BUs in February last year, reflecting the impact of warmer weather as well as continued expansion in manufacturing activity, the report said.

“Above-normal minimum and maximum temperatures in several parts of the country are expected to have heightened demand for cooling during the month,” Crisil Intelligence said in the report.

According to the analysis, between February 19 and 25, maximum temperatures were 4-6°C above normal across parts of the western Himalayan region and the plains of northwest India, while the weekly average minimum temperature was 2-4°C above normal across most parts of the country.

What does the report suggest?

The report noted that cooler conditions in northern and eastern regions during the early part of the month moderated electricity demand to some extent.

Industrial activity also supported the rise in electricity consumption. India’s manufacturing purchasing managers’ index (PMI) increased to 56.9 in February from 55.4 in January, signalling expansion in factory activity.

“With around 50% of India’s power demand arising from industrial and commercial consumers, expansion in manufacturing and industrial activity is imperative for growth in power demand,” the report said.

The rise in consumption was also visible in peak electricity demand during the month. February recorded a peak power demand of 244 gigawatts (GW), marginally higher than the summer peak of 243 GW recorded in June 2025 and only 0.5% lower than the January peak of 245 GW.

Short-term power markets

Short-term power markets also reflected stronger demand. Real-time electricity market (RTM) volumes rose to 4,379 million units (MU) in February from 2,887 MU a year earlier, representing a 51.7% increase year-on-year, according to the report.

At the same time, electricity prices on exchanges softened due to adequate supply. The average market clearing price in the RTM declined 19% year-on-year to ₹3.59 per unit, while the day-ahead market price fell about 18% year-on-year to ₹3.58 per unit.

These price levels allowed distribution companies and commercial and industrial consumers to meet demand at competitive rates by purchasing power through exchanges.

Electricity generation also increased in line with higher demand. Total power generation is estimated to have risen about 2.4% year-on-year to 145 billion units in February, according to the report.

Renewable energy output continued to grow due to higher capacity additions, while hydropower and nuclear generation increased about 15.5% and 17.3% year-on-year respectively during the month.

Looking ahead, Crisil Intelligence expects electricity demand to remain sensitive to weather conditions. The report estimates power demand in fiscal 2026 to increase 1-1.5% year-on-year to about 1,705-1,715 billion units, supported by higher temperatures and steady economic activity.