India's Power Demand Growth Forecast Raised To 8.5% For FY27: ICRA

(MENAFN- KNN India) New Delhi, Oct 23 (KNN) India's electricity demand surged 23.4 per cent year-on-year (YoY) during the first 10 days of October 2026, prompting rating agency ICRA to raise its full-year demand growth forecast for FY27 to around 8.5 per cent from 6.5 per cent earlier.

According to ICRA's monthly power sector update, electricity demand grew 10.2 per cent YoY during the first six months of FY27, supported by higher-than-normal temperatures, sustained cooling requirements and healthy industrial activity.

“Electricity demand remained resilient despite the end of the peak summer season,” said Ankit Jain, Vice-President and Co-Group Head, Corporate Ratings, ICRA.

However, weather-related uncertainties remain a key risk to the demand outlook, reported The Economic Times.

Coal Stocks Remain Below Normative Levels
ICRA said coal stocks at power plants stood at around six days as of October 10, 2026, below the normative requirement of approximately 19–20 days and lower than levels recorded over the past three years.

Domestic coal production declined 3.2 per cent YoY during the first five months of FY27, largely due to lower output from Coal India. In contrast, coal supplies to the power sector increased 4 per cent during the same period.

Jain cautioned that further declines in coal inventories, particularly alongside weaker production or supply constraints, could limit the sector's ability to meet a sharp surge in peak demand. A sustained recovery in coal production and supplies remains important to rebuild adequate stock buffers.

Spot Power Tariffs Remain Above Year-Ago Levels
Spot electricity tariffs on the Indian Energy Exchange averaged Rs 7.7 per unit as of October 10, compared with Rs 7.3 per unit in September 2026 and Rs 2.6 per unit in October 2025.

While tariffs moderated sequentially due to adequate power availability, particularly during solar hours, they remained significantly higher than a year earlier, supported by strong electricity demand.

ICRA said power tariff trends during FY27 would depend on the evolving demand-supply balance and the pace of capacity additions.

(KNN Bureau)

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