Power demand in February rose by 3.1% on-year owing to rising temperatures and consumption, as per data from Crisil. Moreover, between April 2024 and February 2025, power demand is estimated to have increased 4.2% on-year.
“With nearly half of India’s power demand coming from industrial and commercial consumers, expansion of relevant activities is crucial for power demand to continue growing,” the agency said.
While the demand for power continues to rise, Crisil noted that the growth last month is considerably lower compared with 9.9% and 7.1% in the same month of 2023 and 2024, respectively.
Cumulatively, however, this translates to an incremental demand of around 24 billion units (BU) in the past three years during February, it said.
Power demand eased in north India last month after a ‘western disturbance’ — or low-pressure storm triggered rains. Among states, Kerala recorded the highest maximum temperature of 39.2 degree Celsius between February 1 and 26.
Maximum temperatures were markedly above normal in several areas of Haryana-Chandigarh- Delhi, West Uttar Pradesh, East Rajasthan and Konkan and Goa.
The peak demand for power during February touched 238 gigawatt (GW), registering an increase of 16 GW from the same period last year.
As a result, Real Time Market (RTM) volume in the short-term power market surged 23.4% on-year to 2,887 million units (MUs), while the Day Ahead Market (DAM) spiked 13.2% to 5,369 MU. Overall RTM volume at the Indian Energy Exchange (IEX) rose 500 basis points to 30% in February.
In line with the rising demand, power generation also rose near to 5.2% on-year to 143 BU in February. Between February 2022 and 2025, power generation has logged a compound annual growth rate (CAGR) of 6.8%.
As per Crisil, generation of hydro, nuclear and renewable energy rose 25%, 19% and 9% on-year, respectively. “Higher hydro and nuclear generation gained from low-base effect because they had declined 29% and 19% in February 2024, respectively,” it said.
Meanwhile, dispatches of coal to power plants registered an increase of 3.9% on-year between April 2024 and February 2025, which improved inventories. As on February 28, thermal power plants had 54 million tonne (MT) of coal stocks as against 45 MT a year ago.
“To recall, in 2023, higher temperatures brought on by El Nino, along with lower rainfall, had led to a significantly higher dependence on coal. As a result, coal power generation had surged 10% on-year last fiscal,” Crisil said.
Coal inventory has improved to 19 days this February, compared with 16 days in the corresponding previous period.
Crisil now projects power demand to rise 4-4.5% for fiscal 2025 to 1,695-1,700 BU. This comes on the back of three consecutive high-growth years with a CAGR of 7.1% between fiscal 2022 and 2025, resulting in 315 BU of additional power demand.
“In fiscal 2025, demand was driven by severe and prolonged heat waves in the first quarter and insufficient rainfall in July in northern India. Ample economic activity, with estimates of gross domestic product expanding 6.5% on-year this fiscal, is boosting demand, too,”Crisil said.