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India Sees First Q1 Power Demand Drop Since Pandemic, Prices Fall 20%

India's power demand fell by nearly 1.5% year-on-year in Q1 FY26—the first such decline since the COVID-19 pandemic in 2020. According to the Central Electricity Authority (CEA), energy requirement dipped to 445.8 billion units during April–June 2025 from 452.4 billion units in the same period last year. The fall is attributed to lower temperatures and above-average monsoon rains. Peak power demand touched 243 GW, lower than the government’s earlier projection of 270 GW.

Consequently, cumulative power generation dropped by 5.5% in Q1. Thermal power output declined 8%, while nuclear and hydropower generation increased by 11% and 13%, respectively. The softened demand led to a drop in spot electricity prices. In the Indian Energy Exchange (IEX), the average day-ahead market clearing price fell 16% to Rs4.41/unit, while the real-time market price dropped 20% to Rs3.91/unit.

The fall in prices enabled distribution companies and commercial & industrial consumers to procure cheaper power, substituting costlier supply sources. Additionally, coal stockpiles at thermal power plants rose to 60.5 million tonnes as of July 7, nearing the normative requirement of 60.9 million tonnes. This easing of pressure could provide temporary relief, but demand is expected to rise again with upcoming seasonal shifts.