NEW DELHI: India's power demand is expected to rise by more than 5% in the financial year 2026-27, compared to a mere 1% growth recorded in the previous fiscal year, according to ratings agency ICRA. The agency stated on Thursday that the growth in 2026-27 will likely be supported by the agriculture and household sectors, particularly due to expectations of sub-par rainfall from potential El Nino conditions, along with demand from industries and emerging sources such as electric vehicles and data centres.
Peak Power Demand Trends
The peak power demand during the summer of 2025-26 stood at 242.8 GW, down from 250 GW a year earlier, though it crossed 245 GW later in the fiscal year. The power ministry has projected peak demand to reach 270 GW in the current fiscal year.
Thermal Power Sector Outlook
Ankit Jain, vice president and co-group head of corporate ratings at ICRA, noted that the thermal power sector in India is witnessing renewed investment emphasis, while renewable capacity continues to expand rapidly. “Thermal power acts as a reliable base-load supply, aiding grid stability amid expectations of power demand growth,” he said, adding that coal stock at power plants remains comfortable at around 19 days.
Financial Health of Discoms
ICRA also reported that the collective book losses of distribution companies (discoms) improved in 2024-25 compared to the previous fiscal year. The gross debt of state-owned discoms fell to Rs 7.1 trillion in March 2025 from Rs 7.4 trillion a year earlier. However, the agency warned that “such high debt levels are unsustainable for discoms, given their current revenues and profitability.”
Tariff Orders and Hikes
The agency noted that 17 out of 28 states have issued tariff orders for 2026-27, but the approved hikes for the year were largely muted.
