Power demand in the country surged 6.9% on year in March, around 50% higher than the full-year average of 4.3%, as the temperature rose and demand from industrial and commercial consumers soared, as per report by Crisil Intelligence.
The mean monthly temperature during the month was 25.5°C, above the 30-year (1991-2020) normal of 24.71°C. The average high temperature was 32.7°C and the average low temperature 18.3°C, higher than the 30-year normal of 31.70°C and 17.71°C, respectively. Western and east central India also witnessed 1-5 days of heatwave during the month. In the western region, power demand grew by around 10% on year as several regions in Gujarat witnessed six days of heatwave.
The seasonally adjusted India PMI (Purchasing Managers’ Index), a proxy to estimate the country’s industrial activity, grew from 56.3 in February to 58.1 in March, the highest in eight months. “The latest reading showed a substantial improvement in the health of the manufacturing sector that was above its long-run average. With nearly half of India’s power demand emanating from industrial and commercial consumers, expansion of relevant activities is crucial for power demand to continue growing,” the report said.
The peak power demand during the month reached 235 GW on the back of higher cooling requirements, up 14 GW from the previous fiscal.
The real time market (RTM) volume also surged 34% on-year to 3,727 million units (MU), while the day-ahead market (DAM) improved 19% to 5,547 MU, as per Crisil. In March, Indian Energy Exchange achieved the highest-ever monthly electricity traded volume of 11,215 MU, up 29% on-year.
The share of RTM in total electricity volume traded on the IEX rose to a high of 33%, compared with the average of ~24% recorded since its inception in June 2020 to March 2025.
“Despite the surge in volume, the average market clearing price for March 2025 remained stable at Rs 3.93/unit vis-a-vis Rs 3.91/unit due to an increase in power supply,” Crisil said.
Power generation also jumped 8% on-year to 161 billion units (BU) in March, in line with the power demand.
On an on-year basis, coal-based power generation rose 6.7% in March on a high base of 9.4% in March 2024, reaching 120 BU. Coal accounted for 75% of the total power output, highlighting India’s continued reliance on the fuel during times of upswing in power demand. This was followed by renewable energy (RE), which increased 15.4% on-year on a high base of 11.4% in the previous fiscal.
The share of renewable energy in the fuel mix for the month also increased to 14% from 12.7% from March 2024, underscoring the country’s efforts to reach its COP26 targets, said Crisil. Generation of hydro and nuclear energy rose 33% and 17% on-year, with the fuels contributing 6% and 3%, respectively.
Dispatches of coal to power plants also surged 6.25% in March and 6% on-year in fiscal 2025, improving inventories. As on March 31, thermal power plants had 58 million tonne (MT) of coal stock, compared with 51 MT a year ago. Coal inventory improved to 20 days as on March 31, compared with 18 days in March 2024 and 19 days in February 2025.
For Q1FY26, Crisil Intelligence estimates power demand to rise 6.5-7.5% on-year. With the India Meteorological Department forecasting a more than 50% probability of above-normal temperatures during the summer months of April, May and June, cooling demand is expected to increase, the report said.