India’s electricity demand growth is expected to rebound to 5–5.5 per cent in FY2026–27 (FY27), after a subdued expansion of 1.5–2 per cent estimated for FY2025–26 (FY26), according to ICRA. The agency said the power sector continues to underpin economic activity as the country expands renewable energy capacity and strengthens grid infrastructure.

Electricity demand has begun to show early signs of recovery. All-India demand increased 5.1 per cent year-on-year between December 1 and 25, 2025, with average daily consumption at 4.4 billion units. This follows a contraction of 0.8 per cent in November and a sharper decline of 6 per cent in October.

Renewable capacity additions gathered pace during the year. India added 31.2 GW of renewable capacity in the first eight months of FY26, marking a 109 per cent rise over the same period last year, supported by a strong project pipeline and lower solar module prices. However, bidding activity slowed, with only 8.6 GW auctioned during the period due to delays in signing power purchase and sale agreements. Transmission infrastructure remains a key requirement to support further capacity expansion.

Net power generation capacity additions stood at 29.8 GW between April and October 2025, more than double the 12.5 GW added in the corresponding period a year earlier. This increase was driven largely by the commissioning of renewable projects ahead of the expiry of the full waiver on interstate transmission system charges on June 30, 2025. For FY26, net capacity additions are projected at around 46 GW, compared with about 33 GW in FY25.

ICRA also flagged grid curtailments during peak renewable generation hours, underscoring the need for energy storage and grid strengthening to maintain stability and sustain growth momentum into FY27.

Also Read: India adds record 44.5 GW renewable capacity till November

State-wise demand trends showed wide variation in the first eight months of FY26. Gujarat reported growth of 8.5 per cent, while Karnataka and Bihar recorded increases of 6.5 per cent each. Growth remained muted in Maharashtra at 1.2 per cent, Andhra Pradesh at 1.3 per cent, Tamil Nadu at 0.6 per cent and West Bengal at 1.2 per cent.

Several states witnessed a contraction in demand, including Haryana at minus 4 per cent, Punjab at minus 6.2 per cent, Rajasthan at minus 2.1 per cent, Uttar Pradesh at minus 3.4 per cent, Madhya Pradesh at minus 2 per cent and Telangana at minus 2.5 per cent. The divergence was attributed to a higher base in the previous year and weather-related disruptions such as heavy rainfall.

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