At a time when rising electricity demand would typically push prices higher, India’s spot power market moved the other way in January 2026, with prices falling sharply even as consumption increased — signalling a marked improvement in supply availability and grid resilience.
Average prices in the day-ahead market (DAM) fell to ₹3.86 per unit in January 2026, from ₹4.44 per unit in January 2025, registering a 13% year-on-year decline. The correction was steeper in the real-time market (RTM), where prices dropped 16% to ₹3.72 per unit from ₹4.42 per unit a year earlier.
The price softening came despite firm demand conditions. Average peak power demand rose 3% year-on-year to 245 GW in January 2026, compared with 237 GW in the same month last year. Energy met increased 4% to 4,609 million units (MU) from 4,435 MU, indicating that the higher demand was fully met without any supply shortfall.
Market activity
Market activity expanded significantly during the month. The total sell volumes on IEX rose nearly 30% year-on-year to 16.99 billion units (BU) in January 2026, compared with about 13.1 BU in January 2025. The increase in traded volumes alongside falling prices points to improved supply availability and deeper market liquidity.
On the generation side, total electricity generation increased 5% year-on-year to 5,039 MU in January 2026, compared with 4,807 MU a year earlier. Growth was driven largely by renewables, led by a sharp rise in solar output.
Solar generation jumped 27% to 484 MU, up from 382 MU in January 2025, underscoring the growing contribution of solar even during winter months. Wind generation increased 15% to 198 MU, while hydropower output rose 5% to 266 MU, strengthening system flexibility.
Thermal power generation
Thermal power generation remained broadly stable, rising 2% to 3,800 MU from 3,729 MU, indicating that coal-based plants continued to provide base-load support without major ramp-up. Gas-based generation rose 11% to 58 MU, though it continued to account for a small share of overall output.
January is typically a lower-stress month for the power system compared with the summer period. However, the scale of price moderation this year suggests that higher renewable penetration, steady thermal output and improved scheduling and dispatch have widened the supply cushion compared with last winter.
The real-time market continued to play a growing role in balancing short-term demand-supply variations, enabling distribution companies to manage load changes more efficiently and reducing dependence on costlier short-term procurement.