New Delhi: India’s electricity demand is expected to remain under pressure from extreme weather conditions in FY27, with power consumption projected to grow by 6-7 per cent year-on-year to between 1,810 billion units (BU) and 1,830 BU, according to a report by Crisil Intelligence.
The forecast comes after the country recorded its highest-ever peak power demand of 271 GW in May 2026, nearly 10 per cent higher than the previous fiscal’s peak of 245 GW. The sharp rise was largely driven by prolonged heatwave conditions and increased cooling requirements across several parts of the country.
Crisil said the anticipated El Niño conditions from July 2026, coupled with higher temperatures and lower rainfall, are likely to further boost electricity consumption in the coming months. The report noted that rising cooling demand will remain a major driver of power usage during the fiscal year.
Electricity demand surged 11.2 per cent year-on-year to 165 BU in May as temperatures across northern, northwestern, western and central India stayed significantly above normal levels. Several regions experienced temperatures that were 1 to 4 degrees Celsius higher than average, with Uttar Pradesh’s Banda recording a scorching 48.3°C on May 12.
Industrial activity also contributed to the increase in electricity consumption. The Manufacturing Purchasing Managers’ Index (PMI) rose to 55.0 in May from 54.7 in April, indicating steady growth in manufacturing output. Commercial and industrial consumers account for nearly half of India’s total electricity demand.
The report highlighted a strong start to FY27, with energy demand rising 7.6 per cent year-on-year during the first two months of the fiscal. This marks a sharp turnaround compared to a 1.2 per cent decline recorded during the same period a year earlier.
To meet rising consumption, power generation from all major sources increased in May. Total electricity generation climbed nearly 12 per cent year-on-year to 178 BU, supported by higher output from coal, hydro, nuclear and renewable energy sources.
Renewable energy capacity additions also accelerated, with India adding 7.4 GW of new renewable capacity, including small hydro projects, during April and May. As a result, renewable power generation expanded at a faster pace than overall electricity demand.
The report suggests that weather patterns and economic activity will continue to play a crucial role in shaping India’s power demand trajectory through FY27.
