As temperatures soared and industrial activity picked up pace, India’s power demand in March 2025 surged by 6.9% year-on-year, significantly outpacing the annual average of 4.3%. According to a report by Crisil Intelligence, the demand spike was largely driven by increased cooling needs amid early heatwaves and stronger electricity requirements from industrial and commercial users.
Heatwave and regional impact
March witnessed a mean temperature of 25.5°C, higher than the 30-year average of 24.71°C. The average high temperature was recorded at 32.7°C, and the low at 18.3°C, both exceeding long-term norms. Western and east-central India experienced one to five days of heatwave conditions. Notably, Gujarat saw up to six days of extreme heat, leading to a 10% year-on-year rise in power demand in the western region.
This spike coincided with a rise in industrial activity, with the seasonally adjusted India Purchasing Managers’ Index (PMI) rising from 56.3 in February to 58.1 in March, marking an eight-month high. The report highlights that with nearly half of India’s electricity consumption attributed to industry and commerce, the sustained momentum in these sectors significantly boosts overall power usage.
Market and generation trends
Peak power demand touched 235 GW in March, up by 14 GW compared to the previous fiscal, reflecting elevated cooling needs. On the trading front, the real-time market (RTM) volume climbed 34% year-on-year to 3,727 million units (MU), while the day-ahead market (DAM) rose 19% to 5,547 MU. The Indian Energy Exchange recorded its highest-ever monthly traded electricity volume at 11,215 MU, a 29% jump.
Despite the demand surge, average market clearing price remained stable at Rs 3.93 per unit due to improved power supply. Power generation increased by 8% on-year to 161 billion units (BU), with coal-based generation rising 6.7% to 120 BU. Coal remained the dominant source, accounting for 75% of total power output. Renewable energy output also rose 15.4%, boosting its share in the energy mix to 14% from 12.7% a year ago. Hydro and nuclear energy grew 33% and 17% respectively, contributing 6% and 3% to the total generation.
Coal dispatches to thermal plants rose 6.25% in March, pushing inventories to 58 million tonnes—enough for 20 days of operations. Crisil Intelligence projects power demand in Q1FY26 to grow by 6.5-7.5% as above-normal temperatures are expected to persist.
