Defying earlier concerns, power demand in May 2025 remained moderate. Grid operators had projected a record peak demand of 266 GW for the month, but widespread early rains and thunderstorms across the country helped keep temperatures down. As a result, the highest recorded peak, so far, has been 231 GW on May 26. Electricity consumption has also dipped, declining by roughly 3-4 per cent year on year.
With moderate demand, the grid is also relying less on thermal-based capacities compared to last year. The share of electricity generated from coal has been around 70 per cent in May, compared to 74 per cent last year.
Back in January, the National Load Despatch Centre had flagged May and June as “high-risk months” for potential power shortages, especially during non-solar hours. But cooler-than-expected weather has helped ease pressure on the grid, keeping supply stable so far.
The dip in demand has also impacted electricity prices. In May, real-time power prices fell by 25 per cent year on year to an average of Rs 3.56 per unit. A similar trend was observed in the day-ahead market, where average clearing prices dropped nearly 18 per cent compared to last year. The real-time market on the exchanges saw market clearing prices plunge to near-zero levels during certain time blocks due to the surging power supply.
Looking ahead, industry reports suggest full-year electricity demand growth for FY 2026 at 5-5.5 per cent – slightly trailing the expected GDP growth of 6.5 per cent, on the back of the early arrival of the monsoon and predictions of above-average rainfall. The coming months will be crucial and closely watched to see how power demand evolves, and how planned measures are managed amid shifting projections.